Indian Oil, BPCL shares fall on reports of stake buy-out in GAIL
Indian Oil and Bharat Petroleum may buy 26% stake each in gas utility GAIL (India) Ltd, paying the government over Rs 20,000 crore each to become integrated energy firms.business Updated: Mar 19, 2018 15:21 IST
Shares of state-run refiner Indian Oil Corp (IOC) fell as much as 4.7%, to Rs 176 intra-day on Monday, its lowest since Jan. 31, 2017, whereas Bharat Petroleum Corporation (BPCL) dropped as much as 4.1% to Rs 429, on reports of the two oil PSUs buying stake in GAIL India.
At 11.40 am, Indian Oil was trading lower by 3.60% at Rs 178.10, whereas BPCL was down 3.71% at Rs 430.95.
Indian Oil and Bharat Petroleum may buy 26% stake each in gas utility GAIL (India) Ltd, paying the government over Rs 20,000 crore each to become integrated energy firms, according to a report by the Press Trust of India.
According to the report, the two companies may split the government’s 54.89% stake in GAIL equally among themselves, making it their subsidiary. Since this will not be an actual merger but only a transfer of ownership, GAIL India will continue to operate as a listed company with an independent board.
Following Finance Minister Arun Jaitley’s February 2017 Budget announcement of creating integrated oil majors, IOC and BPCL had submitted separate proposals to buy the government’s 54.89% stake in India’s biggest gas marketing and transportation firm, GAIL.
In January this year, Oil and Natural Gas Corp (ONGC) bought out the government’s 51.11% stake in refiner Hindustan Petroleum Corp Ltd (HPCL), for Rs 36,915 crore. But HPCL hasn’t been merged with ONGC and continues to remain a separate listed company with the same board. After the buyout, HPCL has become a subsidiary of ONGC, which gets up to two seats on the company board.
Shares of GAIL were trading 0.09% lower at Rs 440.60 on the National Stock Exchange (NSE) at 11.50 am.