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MOSL: Morning India (1/October/19): 1. BPCL (Strategic divestment on the cards?); 2. Economy; 3. Maruti Suzuki; 4. Agriculture

MOrning India (1/October/19): 1. BPCL (Strategic divestment on the cards?); 2. Economy; 3. Maruti Suzuki; 4. Agriculture

 

Today’s top research idea

BPCL: Strategic divestment on the cards?

• Subsequent to few bold moves in political and economic arenas recently, group of secretaries yesterday approved sale of government's entire stake in BPCL along with few other companies. It is still not clear as to whom would this sale happen to or what would the procedure be for the same.
• Nonetheless, BPCL offers excellent entry point to someone who is looking for participation in one of the fastest growing consumers of petroleum products. In our base case, we value BPCL at INR495 using 1.9x FY21.
• Other valuation methodologies suggest even higher value. A strategic buyer may even ascribe a premium.

Piping hot news

BPCL to SCI, group of secretaries clears strategic stake sale in five PSUs

The government has set the ball rolling on strategic sales, with a group of secretaries on Monday clearing disinvestment in five public sector undertakings (PSUs), which may fetch over Rs 60,000 crore and keep the fiscal deficit in check. This would account for around 60 per cent of Rs 1.05 trillion budgeted from disinvestment in the current financial year.