Government's Discontent with Investor Valuation of State-Owned Oil Marketers
Union Minister Hardeep Singh Puri expressed disappointment over the low investor valuation of state-owned oil marketing companies, despite their profitability. He clarified no immediate plans for full privatization but indicated possible partial ownership sales to improve efficiency. Concerns about investor perceptions and state influence were addressed.
- Country:
- India
Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, voiced his dissatisfaction with the investor community's low valuation of state-owned oil marketing firms. Despite collectively making Rs 2.5 lakh crore in profits over the last six years, these firms face undervaluation compared to app-based companies Swiggy and Zomato, which reported substantial losses in the same period.
Addressing concerns, Puri mentioned there are no plans to sell complete government holdings of these companies, including BPCL. However, partial sales might be considered to boost efficiency. He also pointed out the autonomy enjoyed by state-owned firms compared to family-run businesses, asserting that government-owned enterprises offer better investment returns through regular dividend payouts.
Puri clarified issues around gross refining margins and under-recoveries in LPG sales. Indian Oil Corporation's chairman announced plans to align their GRM computation with industry standards. The minister dismissed ethanol blending concerns, confirming no intentions to exceed the current 20 percent mixing.
(With inputs from agencies.)
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