Govt sale of LIC, Air India, BPCL to be delayed

The coronavirus outbreak has thrown Indian government`s asset sale programme almost out of the window and an ambitious target of 28 billion dollars for 2020-21 stares at a revision. In addition, the Centre is also set to miss the current year target of 8.7 billion dollars, which was revised downward. It would be next to impossible to get bidders for the sale of Air India, when global aviation has taken a huge hit, or Bharat Petroleum Corporation ltd (BPCL), when oil prices have crashed to a historic low. The government had earlier this month invited bids to sell its majority stake in BPCL. Based on the current market capitalisation of 11.6 billion dollars, the government`s stake of 52.98% was valued at around 6.16 billion dollars. But the slump in oil prices post Saudi Arabia`s plan to shore up production, has rendered oil companies less competitive. Other than the initial public offering of state-owned life insurer LIC, disinvestment of Air India and BPCL was key to meeting the disinvestment target of 28 billion dollars in 2020-21. So far, the asset sale has fetched the government 4.63 billion dollars for 2019-20. With less than two week remaining for the current financial year to end, reaching the target of 8.65 billion dollars looks almost impossible. The government has already extended the deadline for submission of preliminary bids for Air India to April 30.