Govt likely to mop up about Rs 8,000 cr from HPCL sell-off

NEW DELHI: The government could mop-up close to Rs 8,000 crore from strategic sale of 34 per cent equity in Hindustan Petroleum Corporation, for which initial bids were invited on Friday.
Although HPCL shares are trading at about Rs 300 per share now at the Bombay Stock Exchange (BSE), bids from strategic partners are likely to be more than double the present market value owing to strategic importance of the oil PSU where the successful bidder would also acquire management control.
Taking into account the fact that the acquirer of HPCL would get a direct entry into the lucrative petro-product retail market, sources associated with the disinvestment process said that bids could be possibly in the range of Rs 700 a share.
The government would offer about 11.5 crore shares out of its holding of around 17.4 crore shares in HPCL to the strategic buyer and even at the present market rate, which does not take into account the strategic importance and control premium, it could mean about Rs 3,500 crore.
Sources pointed to the government''s recent success story of getting Rs 1,000 crore just for not participating in the rights issue in the joint venture Maruti Udyog and allowing its Japanese partner Suzuki Motor Corporation to wrest majority control through enhancing their stake to about 54 per cent.