Indian Refiner Headed for Privatization Reports Bumper Profit

A motorcylcist rides past a Bharat Petroleum Corp. gas station in Pune, Maharashtra. (Photographer: Dhiraj Singh/Bloomberg)

Indian Refiner Headed for Privatization Reports Bumper Profit

Bharat Petroleum Corp., the state-run refiner in the process of being sold by the Indian government, reported a record quarterly profit aided by income from the sale of a unit ahead of its own privatization.

Net income jumped to 119.4 billion rupees ($1.6 billion) in the three months ended March 31 from a loss of 13.6 billion rupees in the same period last year, according to an exchange filing Wednesday. That includes an exceptional gain of 94.22 billion rupees of from the sale of Numaligarh Refinery Ltd.

“In an unprecedented year that began with a lockdown across the country and subdued business & economic activities, fourth quarter was a stand-out quarter that helped the company report its highest-ever growth in the bottom line,” Finance Director N. Vijayagopal said in an emailed statement. “We witnessed a V-shaped recovery in the second half of the financial year, resulting in robust growth in fuel sales.”

The second-biggest state refiner sold its entire holding in Numaligarh Refinery to a consortium of state-run firms -- Oil India Ltd. and Engineers India Ltd. -- and the state government of Assam for 98.8 billion rupees.

It used part of the proceeds to pay off some loans and announced a total dividend of 58 rupees a share. Most of that will go to the federal government, which owns 53% of the company. The company narrowed its debt-equity ratio to 0.48 as on March 31 from 1.26 a year earlier.

The government allowed bidders access to the financial data of Bharat Petroleum in April in preparation for its sale.

India hopes to complete the process in the current financial year, although the second wave of the Covid-19 outbreak could slow it down. The sale, which would be the country’s biggest, is crucial for the government that is in dire need of funds to make up for a shortfall in tax revenue because of the pandemic.

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