BPCL spurted on Monday on renewed buying support ahead of the inter-ministerial group meeting this week, in respect of the state-run company's privatisation.

By 12:30 IST, the Bharat Petroleum Corporation rose by 3.49% to Rs 213.70 on the BSE. Over 435,000 shares changed hands on the counter. In the 10 sessions, the BPCL scrip has risen by 14.4% from Rs 186.80 on 31 January 2003.

Dealers said the rally on the BPCL counter was on hopes that the company's divestment process may gain momentum. An inter-ministerial group will meet later this week to discuss the quantum of the company's equity shares to be offered in the local and international markets. The IMG will also chalk out the modalities and timing of the issues.

The Centre holds 66% equity stake in BPCL. It will offload 35.2% stake through a public offer (domestic and global) and 5% to employees at concessional rates. After the divestment, the Centre will be left with a 26% holding in the company.

Meanwhile, in view of the limited depth of the domestic market, the divestment ministry has proposed to offer only 10% equity locally and the rest in the international markets.

In this regard, the IMG comprising officials from divestment, petroleum, finance and law ministries, will take a final decision. It will also decide the terms for appointing a consultant for the public float.

Recently, BPCL announced that it will invest Rs 7,500 crore (Rs 75 billion) in the next five years for floating joint ventures, for modernisation, restructuring and brand building. The company plans to open 600 to 700 retail outlets by next year.

Currently, BPCL has about 4,500 retail outlets and a 20% share in the petroleum products market. As per recent reports, BPCL plans to double its refining capacity to 2,40,000 bpd from the current 1,30,000 bpd by October 2004, and modify its refineries so that it can process different grades of oil.

For the third quarter ended 31 December 2002, BPCL recorded a net profit of Rs 233 crore (Rs 2.22 billion), up by 224% over Rs 71.90 crore it registered in the corresponding period of the previous year. Net sales increased by 29% to Rs 12,645.2 crore (Rs 126.45 billion) from Rs 9,801.1 crore (Rs 98.01 billion) in DQ 2001.

The board of directors also declared an interim dividend of 20% for the financial year 2002-03 (Rs 2 per share).

BSE code: 500547