BPCL Shares Fall On Lower-Than-Expected Dividend
A diesel gas pump stands at a Bharat Petroleum Corp. gas station in New Delhi. (Photographer: Kuni Takahashi/Bloomberg)

BPCL Shares Fall On Lower-Than-Expected Dividend

Shares of Bharat Petroleum Corp. fell after the state-owned oil marketer announced its second interim dividend, less than what analysts anticipated.

The oil refiner’s board at its meeting on March 16 declared an interim dividend of Rs 5 per equity share of face value Rs 10 each for the financial year 2020-21, according to an exchange filing. The board has fixed March 27, 2021, as the record date to determine the eligibility of the shareholders to receive the said interim dividend.

Earlier this month, N Vijayagopal, director-finance at BPCL, had told BloombergQuint that the company will pay a dividend to its shareholders after the sale of its entire stake in Numaligarh Refinery Ltd. is completed. Its board has approved the sale of its 61.25% stake in the Assam-based refinery for Rs 9,876 crore to a consortium of Oil India Ltd. and Engineers India Ltd., along with the Government of Assam.

Here’s what analysts had projected:

  • Credit Suisse: “Our expectation on reserve price is about Rs 500 per share and this includes potential dividend of Rs 50-60 per share out of cash proceeds from the sale of its stake in Numaligarh refinery and BPCL trust share of 7.33%.”
  • JPMorgan: By monetising the treasury stake, BPCL could distribute it as a dividend, which works out to Rs 29 a share, with the government netting Rs 4,400 crore.
  • Emkay: The sale is an important milestone in BPCL’s divestment process and cash proceeds may also be paid to BPCL shareholders as a special dividend of Rs 40-50 per share in the next one-two months.
  • Motilal Oswal Securities: BPCL can announce an incremental dividend of Rs 38 apiece after the stake sale. The state-owned company has already announced an interim dividend of Rs 16 apiece in the third quarter of FY21.

Shares of BPCL fell as much as 4% around 11 a.m. to Rs 435.6 a piece, and are down for the second straight day. Of the 39 analysts tracking the company, 38 have a ‘buy’ rating and one suggests a ‘hold’, according to Bloomberg data. The average of the 12-month consensus price targets implies an upside of 15.3%.

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