Financial Daily from THE HINDU group of publications
Friday, Aug 30, 2002
HPCL, BPCL plummet on disinvestment delays
MUMBAI, Aug. 29
THE news of postponement of the meeting of the Cabinet Committee on Disinvestment to September 7 led to a steep fall in the share prices of oil PSU majors, HPCL and BPCL, on the bourses on Thursday.
Sources in the market said that the selling pressure mounted with concerns over delay in the disinvestment process. "The two majors are key to the disinvestment process," an analyst said.
Both the stocks have fallen by more than 13 per cent over the last one week.
The share price of HPCL fell 4.70 per cent to close at Rs 266.60, with 9.05 lakh shares being traded on the BSE. On the NSE, HPCL went down 4.48 per cent to close at Rs 267.05, with 21.30 lakh shares being traded.
BPCL's stock fell 5.44 per cent to close at Rs 270.05 with 7.47 lakh shares being traded on the BSE. On the NSE, it dropped 4.82 per cent to close at Rs 271.20, with 23.54 lakh shares being traded.
Reports said that the CCD meeting was postponed as the Defence Minister, Mr George Fernandes, had expressed apprehensions about sale of Government stake in these two companies.
In his letter to the Prime Minister, Mr Fernandes had reportedly said that the downstream petroleum companies played a crucial role in maintaining strategic oil reserves during war. Mr Ram Naik, Minister of Petroleum and Natural Gas, has also reportedly cited security concerns in a letter to the Prime Minister.
Mr L.K. Advani, Deputy Prime Minister, tried in vain to ensure that the meeting took place as per schedule, sources said.
As the drama unfolded during the week, share prices of the two oil majors headed southwards, analysts said. The sale of Government stake in the two oil companies is being seen as one of the toughest confrontation between the anti and pro disinvestment lobbies in the Government. Also at stake is the perception outside about the country's divestment and reforms programme, according to analysts.
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