Government may raise foreign investment limit to aid BPCL sale

By Shruti Srivastava and Debjit Chakraborty

India is considering making it easier for foreign investors to acquire control of Bharat Petroleum Corp., according to people familiar with the matter, as the government tries to sell the state firm and bridge a widening budget deficit.

If the cabinet clears the proposal, overseas funds would no longer need government approval to purchase a 100% stake in state-run refiners cleared in-principle for disinvestment, the people said, asking not to be identified as the deliberations are private. The limit will stay 49% for firms not lined up for asset sales.

India needs to find a buyer for its 53% stake in BPCL, one of two major state firms -- the other being Air India Ltd. -- identified by the government to help shore up its finances following a deadly second wave of coronavirus infections. The government has budgeted $23 billion from divestments in the financial year that started April 1.

A finance ministry spokesperson refused to comment on the matter.

BPCL swung to a record profit of 119.4 billion rupees ($1.6 billion) in the three months ended March 31 from a loss of 13.6 billion rupees the previous year. The numbers were aided by the sale of a unit.