The Modi government is contemplating amending the existing Foreign Direct Investment (FDI) policy to allow foreign investors to take a majority stake in Bharat Petroleum Corporation Limited (BPCL), India’s second largest oil refinery. Sources gave this information. The government is privatizing BPCL and selling its 52.98 per cent stake in the company.
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The Vedanta Group of Interests (EOI) has submitted a 52.98% stake in BPCL to the government. The other two bidders are said to be global funds, one of which is Apollo Global Management. Sources said the matter is under discussion between the Department of Investment (DIPAM), the Department of Industry (DPIT) and the Department of Economic Affairs (DEA).
Currently, only 49 percent of FDI is allowed through automated means of petroleum processing operated by public sector undertakings (PSUs), and this can be done without any investment or impairment of existing PSUs’ domestic equity. With this provision no foreign player will be able to buy more than 49 per cent stake in BPCL.
According to sources, DIPAM has proposed to amend the existing FDI policy to allow 100 per cent FDI in Central Public Sector Enterprises (CPSEs) in the petroleum and natural gas sector. On the other hand, the Department of Industry and Internal Trade Promotion (DPIIT) has suggested a separate provision for this particular case.