The Union Government is taking steps to acquire a substantial stake in Hindustan Petroleum Corporation Ltd (HPCL) to offer financial support to fuel retailers, who faced losses from selling petrol and diesel at discounted rates in the previous year, according to officials.
In response to the financial challenges faced by fuel retailers like Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL), the government has advised HPCL to issue preferential shares to the government. This move comes alongside the government’s request for fuel retailers to initiate rights issues.
The government has allocated Rs 30,000 crore as support to state-run oil retailers, and after accounting for rights issues of IOC and BPCL, it is estimated that the government will have Rs 9,000 crore to Rs 10,000 crore left for HPCL. With HPCL’s current market capitalization standing at Rs 39,650 crore, this is likely to result in a significant stake for the government, depending on share prices.
This decision follows a five-year interval since the government’s previous move to sell its 51.1% stake in HPCL to Oil and Natural Gas Corporation (ONGC) for Rs 36,915 crore. Although the sale was part of a government disinvestment program, the government maintained indirect control over HPCL through its ownership of state-owned ONGC.
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