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BW Businessworld

A Refined Behemoth

The central government on 20th November 2019 had accorded in-principle approval for strategic disinvestment of the government’s shareholding in BPCL excluding BPCL’s shareholding in Numaligarh Refinery (NRL).

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There are a number of key things to note about Bharat Petroleum Corporation or BPCL, India’s sixth-largest company by turnover. During 2019- 20, it was India’s second-largest oil marketing company (OMC) with standalone domestic sales of over 43.10 MMT and market share of 22 per cent. It was also India’s third-largest in terms of refining capacity (15.33 per cent of India’s refining capacity).

As of 31st March 2020, BPCL had nearly 26 per cent market share in the LPG business with a total of 6,100 distributors and 52 LPG bottling plants. With focus on providing environment friendly fuel facilities at retail outlets (RO), CNG was commissioned at 114 ROs during 2019-20.

During the year, 1,447 new retail outlets were commissioned by BPCL, the highest ever in a financial year amongst PSUs, 571 of which were in key priority rural markets. A total of 17 company owned and company controlled (COCO) outlets and six one stop trucker and shops (OSTSs) outlets were also commissioned during the year. The total number of retail outlets at the end of 2019- 20, taking into account those newly commissioned during the year and those decommissioned, stood at 16,234.

During 2019-20, the aggregate refinery throughput of BPCL’s refineries at Mumbai and Kochi, along with its subsidiary company, Numaligarh Refinery (NRL) and considering 50 per cent throughput of joint venture Bharat Oman Refineries (BORL) was 38.30 MMT, as compared to 36.76 MMT during 2018-19.

The BPCL group ended the year with sales of 43.36 MMT, as compared to 43.30 MMT during 2018-19. During the year, the group exported 2.66 MMT of petroleum products, as against 1.99 MMT during 2018-19.

During this financial year, the group achieved gross revenue from operations of Rs 3,29,797.16 crore, as compared to Rs 3,40,879.15 crore in 2018-19. The net profit attributable to BPCL stood at Rs 3,055.36 crore in 2019-20, as against Rs 7,802.30 crore in the previous year. The group recorded earnings per share of Rs 15.53 in the current year, as against Rs 39.67 in 2018- 19 after setting off the non-controlling interests.

BPCL gained and achieved a lot under the leadership of its Chairman & MD D. Rajkumar during FY20. He however superannuated on 31.08.2020, making way for K. Padmakar, who was Director (Human Resources) at the time. The post of CMD is an ‘additional charge’ w.e.f. 01.09.2020 conferred by the Ministry of Petroleum and Natural Gas. Padmakar is BPCL veteran of more than 35 years having worked across the entire human resource management landscape. He has also held various positions of responsibility encompassing HR policy and strategy and was responsible for organisational learning and talent management.

DISINVESTMENT: During the year under consideration (FY20), the Government of India disinvested 69,12,370 equity shares in favour of Bharat 22 ETF (an exchange traded fund comprising of PSU stocks). Consequently, the holding of the President of India in the equity share capital was reduced to 52.98 per cent from 53.29 per cent as on 31st March 2020. The central government on 20th November 2019 had accorded in-principle approval for strategic disinvestment of the government’s shareholding in BPCL excluding BPCL’s shareholding in Numaligarh Refinery (NRL). Further, as per the above approval, BPCL’s shareholding in NRL has to be divested to a central public sector enterprise (CPSE) operating in the oil and gas sector along with transfer of management control.