As per the recent announcement made by Union Finance Minister, Nirmala Sitaraman, Indian Government is planning to sell Air India & Bharat Petroleum. They are hoping to raise Rs 1 lakh crore in the current fiscal year from the sale in a quest to fight the economic slowdown.
Air India, a government-owned enterprise, is the flag carrier airline of India. The airline operates a fleet of Airbus and Boeing aircraft. It runs a total of around 94 domestic and international destinations. Bharat Petroleum, on the other hand, is a Government of India controlled Maharatn oil and gas company. It operates country’s two large refineries in Kochi and Mumbai and is India’s 2nd largest downstream oil company after ONGC.
Currently, Governments held a stake of around 53.29% in Bharat Petroleum Company Limited, where the Central and State Governments Collectively owns 1,15,60,95,962 Fully Paid-up Equity Shares in the Company as on 31.03.2019. The BPCL’s share opened on Monday Morning at Rs. 523.80. Bharat Petroleum’s current market capitalisation comes around at Rs. 1.02 lakh crore. With the sale its stakes in BPCL, the government is hoping to bag around Rs. 65,000 crores including any entry premium.
Apart from this, the Government of India is the sole owner of a 100% stake of Air India Limited, which amounts to around Rs. 248.93 Billion.
As of now, Country is facing an economic slowdown and finance ministry is endeavouring different policies in an attempt to fight the crisis. In a similar bid, Government is planning to raise Rs 1 lakh crore in the current fiscal year by selling its stake in Air India and BPCL by March 2020. This comes after Finance Minister Nirmala Sitharaman recently made an announced about the government’s plan. She confirmed it in a conversation with Times of India.
She further highlighted that Investors are showing positivity and interest in Air India at the moment, as compared to the tepid response that they received a year ago.
The government is expecting to bag a financial cushion with the sale of the two state-owned companies which could help them to cope with one of the steepest demand slowdowns since last few decades.
While showing a ray of hope towards Indian Economy, Sitharaman said that government is on the right track towards resolving the economic slowdown and added that “several sectors are now coming out of distress”.
Government is also expecting Goods and Services Tax collections to bounce back, following notable improvement citings in various sectors and steps taken to provide a boost to the ailing economy.
Many rating agencies have forecasted a lowered GDP growth of the country for the quarter ended in September 2019. It was concluded to be below 5 per cent. However, Finance Minister exhibited brief confidence that the economy will bounce back in due course.
Sitharaman further claimed that there the demand of around Rs 1.8 lakh crore in loans from banks in the outreach programme during the festival season, is another indication of revival in consumer sentiments.
“If consumer confidence is not on way to being restored, why would you think that such an amount would have gone out as loans during the two outreach programmes started by banks? And, it is all over the country,” she added.
Source: Source: Bharatpetroleum.com, Businesstoday.in, Indiatoday.in
