HPCL recovered towards the close of the session on Thursday on the back of hopes that the government may get the required support in Parliament for divesting its equity in state-run oil companies.

By 15:28 IST, the HPCL scrip rose by 3.27% to Rs 304.60 on the BSE, recovering from its day low of Rs 290. A substantial volume of over 1.15 million shares was recorded on the counter. The stock has risen by 13% from Rs 269.40 on 25 April 2003.

As per market buzz, Unit Trust of India and Life Incorporation of India were active buyers on the HPCL counter.

Dealers said the recovery in the HPCL stock was purely on rumours that the government may receive the required support in Parliament for selling its stake in state-run oil refineries. Meanwhile, there were reports that the divestment ministry is likely to begin the due diligence for HPCL by June-end.

Earlier, the Supreme Court had issued a notice to the Centre over the proposed divestment in state-run oil refiners. The notice followed a public interest litigation filed with the SC by the Centre for Public Interest Litigation, terming the divestment as illegal. CPIL contended that the government's decision to divest stake in HPCL and BPCL did not have parliamentary approval.

HPCL and BPCL, which together command a 40% market share for petroleum products, were nationalised through an Act of Parliament in the 1970s. CPIL feels that divestment in these two companies could be done only by repealing or amending the said Act.

Earlier, the Centre finalised the privatisation of HPCL through a strategic sale. As per its plan, 34.01% of HPCL's equity will be sold to a strategic partner and 5% to the company's employees. The Centre will retain 12% holding in HPCL. Currently, the Centre's stake in the company is at 51.01%.

HPCL has about 4,600 retail outlets and a 20% market share in retailing petroleum products.

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).