New Delhi: The Department of Investment and Public Asset Management (DIPAM) has proposed an amendment in India's Foreign Direct Investment (FDI) policy in order to allow foreign investors to pick up more than 49 percent share in disinvestment-bound Bharat Petroleum Corporation Ltd (BPCL) and the proposal is being considered seriously by the Centre, said sources in the Finance Ministry. According to the current FDI policy, 100 percent FDI in petroleum and natural gas is allowed in exploration activities under automatic route. Only 49 percent FDI in petroleum sector is allowed in by Public Sector Undertakings (PSUs), without any disinvestment or dilution of domestic equity in the existing PSUs under automatic route.
"A proposal has been moved by DIPAM to raise the FDI limit for allowing global investors to pick up a majority stake in BPCL. And the Ministry of Finance is considering it seriously," said one of the sources quoted above. The person added that while DIPAM has pitched for allowing 100 percent FDI in the sector, a consensus is yet to be reached on the matter between the different departments of the Ministry of Finance.
The government is in the process of disinvesting its 52.98 percent stake in BPCL and has declared its intention to complete the process in FY22. On April 10, the government opened BPCL's data room for access to prospective bidders. Three entities — Vedanta, private equity firms Apollo Global and I Squared Capital's arm Think Gas — have thrown their hats in the ring to acquire the government's stake and management control in BPCL.