Vedanta’s $12-billion tag means BPCL’s each share at Rs 400-410

The active futures contract, which derives its value from the underlying share, rose one percent to Rs 400.25 as its open interest declined marginally by 2%, implying short covering.
Picture for representational purpose (File Photo |EPS)
Picture for representational purpose (File Photo |EPS)

MUMBAI: Commodity behemoth Vedanta group’s price tag of $12bn for BPCL failed to enthuse investors as the offer works out to around Rs 410 a share for the state-owned oil company, based on the USD-INR closing of Rs 74.15 Friday and 216.92 crore paid-up shares as of FY21.

BPCL’s share closed up a per cent at Rs 398.6 a piece, a day after Anil Agarwal, chairman, Vedanta Resources, told media persons in Riyadh that the group would not bid “aggressively”, but would put the “right price” for the oil refiner.

The cash-based delivery volume of 38.34% was well below the three month average of 52%, NSE data shows. “It shows the investor response was tepid,” said an industry source, who added that the divestment of the oil refining company would remain a “challenge” amid global energy majors’ “inspirational” push toward green energy from a fossil fuel-based regime.

The active futures contract, which derives its value from the underlying share, rose one per cent to Rs 400.25 as its open interest declined marginally by 2%, implying short covering. Options’ sellers sold 1.65 lakh shares at Rs 400 strike call, implying muted expectations of a rise above Rs 407, which will enable them to pocket the premium paid by option buyers, who would gain if the price rose above Rs 407 by expiry on Jan 27.

BPCL is the second largest state-owned oil refiner by market capitalisation after Indian Oil. It reported a net profit after tax and exceptional items (sale of Numaligarh refinery) of Rs 17,320 crore in FY 21 against Rs 3,666 crore in the preceding financial year. The share had hit a 52-week high of Rs 503 on NSE on September 14 last year.

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