EIL sell-off may be put off due to delay in BPCL, HPCL sale

MUMBAI: Amid uncertainty over the timing of disinvestment in BPCL and HPCL, the government is likely to postpone the privatisation of Engineers India Ltd which gets most of its business from the two oil companies, a top official said.
EIL, which gets over 50 per cent of business through negotiated price from public sector companies, might lose value if it was privatised before strategic sale in oil companies, Union disinvestment secretary Pradip Baijal told reporters on the sidelines at a seminar on corporate governance.
The issue would be taken up with the concerned ministry and other departments, Baijal said.
Government, which currently owns 90.39 per cent stake in EIL, has decided to divest 51 per cent of its shareholding in favour of a strategic partner. An additional 10 per cent stake was to be offered to employees at one-third of the market price or bid price, whichever is lower.
Asked about the schedule for a meeting for HPCL and BPCL sale, he said no time has been fixed as yet.
Speaking at the seminar, Baijal said the concept of government as a shareholder was becoming irrelevant in the current business environment where markets were flush with funds and interest rates were going down.
The government has pumped in large amount of money as a equity investments in the public sector units but the returns have been low compared to market rates, he added.