Oil India stock high after the bid for BPCL’s Numaligarh Stake announcement
Oil India Ltd share prices have seen a 52-week high jump after the government oil explorer company in association with Engineers India Ltd. announced its plans of going ahead with bidding to acquire Bharat Petroleum Corporation Ltd’s (BPCL) stake in Assam located Numaligarh Refinery Ltd.
Currently, Oil India holds a 26% stake in Numaligarh Refinery while BPCL holds a 61.65% stake. The exact percentage share of stake between Oil India and Engineers India will be decided by the extent of the right of the first offer that will be exercised by the Government of Assam. It is to be noted that currently, Assam Government holds a 12.35% stake in the said refinery.
Based on third quarter results state owned BPCL had announced of intentions of completely divesting its stake in Numaligarh Refinery. Indian government had said while announcing its divesting plans of BPCL holding, that offering will be inclusive of entire refinery business except for its stake in the refinery.
N. Vijayagopal, Finance Director of BPCL said, “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.”
Numaligarh Refinery is largest customer of Oil India’s crude that is produced in its northeastern fields. Oil India said in its bid filing, “The acquisition is expected to improve synergies in Oil India’s portfolio.”
Following the bid announcement, Oil India shares saw a rise of 4.2% in Friday early trade that equated to INR 126.9 per share, making it the highest since February 2020. Stocks for Oil India are now on a rise for the fifth consecutive day. According to Bloomberg, of the 24 analysts who are tracking Oil India, 15 have recommended a “buy” rating, five a “sell” and four have suggested a “hold” rating. Shares of Engineers India Ltd have also gained by 3.4% recording INR 77.2 per piece.