BPCL Expects To Complete Numaligarh Refinery Stake Sale By March-End
Numaligarh Oil refinery tanks stand in Golaghat, Gujarat (Photographer: Adeel Halim/Bloomberg)

BPCL Expects To Complete Numaligarh Refinery Stake Sale By March-End

Bharat Petroleum Corp. is looking to complete sale of its stake in the Assam-based Numaligarh Refinery Ltd. by the end of March.

“We are hopeful that if the government approvals are there in the manner we work, then we will be able to close this by March 31 this year," N Vijayagopal, director, finance at BPCL, told BloombergQuint in an interaction.

The oil marketing company will sell its 61.65% holding in the refinery to state-owned peers and the Assam government ahead of its own planned strategic sale that will see the government cede control.

13.65% of BPCL’s stake in the Numaligarh refinery will go to the Government of Assam at the same price the deal will be completed with a consortium of Oil India Ltd. and Engineers India Ltd., said Vijayagopal. A transaction adviser hired by the government is already conducting the valuation exercise, he said.

Also read: BPCL Q3 Results: Profit Rises 24% On Higher Other Income

The government of Assam will increase its stake to 26%, while Engineers India will be a new shareholder with a minority stake, and the refinery will become a subsidiary of Oil India.

The board of BPCL has approved the share-purchase agreement and the draft has been shared with the buyers, Vijayagopal said.


Numaligarh refinery’s performance has improved after the excise duty hike in May last year as it gets exemption from the levy for being located in North East India. The benefit will continue despite its sale to other state-run units.

Numaligarh refinery paid a dividend of around Rs 600 crore in the third quarter, said Vijayagopal. Usually, the dividend comes in the fourth quarter, and BPCL may get another one, he said.

Vijayagopal expects a fairly good valuation for its stake in Numaligarh refinery. “Unlike other refineries, NRL’s profitability will be considerably benefitted mainly by the excise duty benefits, plant configuration and we expect fairly good valuations.”

Numaligarh is also expanding capacity from 3 million tonne to 9 million tonne. They have the licences, Vijayagopal said, adding the estimated cost rose by Rs 2,000 crore to Rs 28,000 crore after changes to refinery configuration. Project economics, however, won’t be part of the valuation exercise.

Watch the interview with BPCL's Director - Finance N Vijayagopal:

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