Divestment of Bharat Petroleum Corporation Limited (BPCL) is presently in due diligence stage which has not been completed, the government informed the Parliament on Tuesday.
Responding to a question about the divestment of the state-owned refiner, Minister of State for Finance Bhagwat Karad told the Rajya Sabha that transaction advisers invite financial bids via request for proposal (RFP) document to the qualified shortlisted bidders only after due diligence is completed.
The reserve price is fixed after the completion of financial bidding, he said, adding that this eliminates the possibility of any bidder having knowledge of the reserve price before bidding starts.
“The transaction adviser and asset valuer submit their independent valuation reports in sealed covers, which are opened for fixation of reserve price only after the process of financial bidding is complete so that none, including the government officials, are aware of the valuation before the financial bidding,” the minister said.
“The financial bids are not opened before the fixation of reserve price. Hence, while fixing the reserve price, the government officials do not have any knowledge of the financial bids. This ensures that the fixing of the reserve price is not influenced by the financial bids and vice versa. The selection of strategic buyer is based only on the satisfactory outcome of financial bidding,” Karad said.
To a question about disclosure of potential price of the refiner, Karad said the question of BPCL’s valuation does not arise at this stage as the transaction has not reached financial bidding stage.
Besides, he said, the information about BPCL’s market cap is widely available in public domain as it is a listed company and its shares are regularly traded.