HPCL advanced further on Monday on buying support from institutions following reports that a inter-ministerial group is likely to meet on Thursday to shortlist the names of bidders for the state-run oil refiner.

By 13:10 IST, the Hindustan Petroleum Corporation scrip was up by 2.11% at Rs 307.65 on the BSE. Over 3.34 lakh shares changed hands on the counter. In the last four sessions, the scrip rose by 5.9% from Rs 290.55 on 1 April 2003.

Dealers said there was good buying support for the stock from institutions including foreign institutional investors, on hopes of rapid progress on the privatisation front as well as huge dividend pay-out for FY 2002-03. Analysts also said that the rise in the scrip was due to similar considerations.

Meanwhile, there were reports of aggressive bidding for acquiring a strategic equity stake in HPCL. A host of foreign companies like the US-based ChevronTexaco, Malaysia's Petronas, Ango-Dutch oil major Shell, British Oil major BP and Saudi Aramco are reported to have put in initial bids. Domestic oil and gas and petrochemicals major, Reliance Industries, is also reported to have put in a bid and so has Ruia group oil firm Essar Oil.

These bidders see HPCL's strong retailing network as quite attractive. HPCL has about 4,600 retail outlets and a 20% market share in retailing petroleum products. The government announced its plans to privatise HPCL through a strategic sale for which it has already appointed HSBC as global advisor.

In January 2003, the government gave the green signal for divestment in HPCL. As per its plans, HPCL's equity (34.01%) will be sold to a strategic partner and 5% to the company's employees. The government will retain 12% holding in the company. Currently, its stake in HPCL is at 51.01%.

Earlier, the Supreme Court gave a virtual clearance to the Centre to proceed with the privatisation of HPCL, saying the pendency of a petition challenging the same should not deter the government from divesting its equity stake in the company.

A Bench comprising Justice M B Shah and Justice Arun Kumar adjourned the hearing on a writ petition filed by Federation of All India Petroleum Traders.

For the third quarter ended 31 December 2002, HPCL registered a gigantic 444% rise in net profit to Rs 330.62 crore (Rs 3.3 billion) on a 28% jump in net sales to Rs 14,210.23 crore (Rs 142.1 billion). The company has recommended an interim dividend of 20% (i.e. Rs 2 per share) for the financial year 2002-03.

BSE code:500674