India's Reliance Industries may bid for a stake in state-run oil refiner Hindustan Petroleum Corp Ltd, RIL chairman Mukesh Ambani said on Friday.
"Yes. Sure," Ambani told reporters, when asked whether Reliance would be interested in buying a strategic stake in HPCL. "Let us see the government policy in detail."
The government said earlier this week it would press ahead with its privatisation programme and would sell stakes in Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd.
The government owns 51 per cent of HPCL, which has more than 4,600 petrol stations spread across the country to retail a prospective strategic partner's products.
"If Reliance chooses to bid for HPCL, then it would a serious bidder because HPCL would bring to Reliance a ready marketing set up for it to sell its refining products," Rajesh Jain, director at Mumbai-based Pranav Securities, told Reuters.
"The news will have a positive impact on HPCL's share price."
HPCL closed 1.91 per cent higher at Rs 275.10 on Friday on the Bombay Stock Exchange, outpacing the 0.56 per cent gain on the main index.
Privatisation debate
Reliance, which is also India's largest petrochemicals maker, bought a 26 per cent stake in state-run Indian Petrochemicals Corp Ltd from the government in May at Rs 231 a share, totalling Rs 14.91 billion ($309 million).
Earlier the government had postponed the privatisation of cash rich oil refiners, which together control 40 per cent of the $15 billion oil products market, by three months in September because of a deep rift in the Cabinet over the pace of asset sales.
Some ministers had said selling the two oil companies would compromise India's oil security and the oil ministry favoured a public offer for both firms so that the government could retain control over the profitable companies.
The government, which hoped to raise Rs 120 billion ($2.49 billion) this financial year from its privatisation programme, has already admitted it will fall short of the target due to the delay in the sale of oil firms.
It had raised only about Rs 31 billion in the first six months of the year.
India's decade-old privatisation drive got off to a slow start because of opposition from unions and political parties who accused the government of selling the firms cheap.
The sputtering drive moved into high gear earlier this year after the government successfully sold large stakes in Videsh Sanchar Nigam Ltd, an overseas telephone service provider, and IBP Co Ltd, an oil products retailer.
