Markets seem to have endorsed the divestment ministry's point that strategic sale is the better option for selling government companies.

The market price of Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd were nearly the same till the compromise divestment formula for the two oil companies was revealed.

On December 5, the government decided at an informal meeting of key ministers chaired by Prime Minister Atal Bihari Vajpayee that HPCL would be sold to a strategic investor, while government equity in BPCL would be off-loaded in markets.

The next day, the HPCL scrip witnessed a sharp Rs 50 gain to close at Rs 276, while the BPCL scrip gained Rs 20 to close at Rs 215.

On January 10, when the compromise divestment formula was formally announced in Parliament, HPCL was almost stable and gained Re 1 to close at Rs 270, but the BPCL scrip shed Rs 4 to close at Rs 200.

Interestingly, in the past six months, the BPCL scrip peaked at Rs 351, which was significantly higher than the six-monthly peak of the HPCL scrip at Rs 339.

Even in terms of the troughs hit by the two scrips in the past six months, BPCL had done better at Rs 168.

However, the meeting on December 5 separated the two companies and the gap between the two scrips has stayed in the Rs 50-60 level since then.

In the last trading session on Friday, HPCL closed at Rs 294, while BPCL ended the day at Rs 231.

The divestment ministry had argued that the price realisation for the government would be higher if it relinquished management control in both the companies.