HPCL plodded on early on Friday, still propelled by reports that the company's divestment process was received with much enthusiasm by prospective bidders.

The scrip of the state-run oil refiner edged up 0.88% to Rs 302.90 in early trades. It, however, came off the day's high of Rs 304.70. A total of 270,000 HPCL shares were traded on BSE in a little over half-an-hour of trading on BSE.

A clutch of foreign oil majors have put in initial bids to acquire government control over the PSU oil major. However, the stock's recent surge has materialised not without volatility. On Monday (17 March 2003), the scrip surged 4.1% to Rs 295.30 on heavy volumes of 23.4 lakh shares after a number of foreign oil companies put in initial bids for the government stake. 17 March was the last day for presenting bids. Volatility marked the next session as well when the scrip ended flat at Rs 295.65 after it gained as much as 2.5% to Rs 302.95, earlier in the day. The scrip oscillated again on Thursday between Rs 302 (the high) and Rs 294 (the low). Some FIIs are believed to have picked up the stock of late.

Aggressive bidding for the stake in the company is expected as a host of foreign companies like the US' ChevronTexaco, Malaysia's Petronas, Ango-Dutch oil major Shell, British Oil major BP and Saudi Arabian national oil company Saudi Aramco have put in initial bids. Domestic oil and gas and petrochemicals major Reliance Industries is also reported to have put in bids and so has Ruia group oil explorer Essar Oil.

These bidders see the company's strong retailing network as the prime bait. HPCL has about 4,600 retail outlets and a 20% market share in retailing petroleum products.

Under the divestment process, the government is offloading a 34% stake in HPCL. Market men say if all goes well, HPCL's divestment may be completed by June 2003. The only hitch now is the US-Iraq war. A long lasting war may prompt the government to defer HPCL's divestment given the strategic importance of a refinery in war times, the market believes.

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 also recommended an interim dividend of 20% (i.e. Rs 2 per share) for the financial year 2002-03.

HPCL recently denied media reports that it may offer a voluntary retirement scheme before its sell-off.

Meanwhile, the Centre has assured the country that it has enough of reserve oil stocks to last the country for two months if oil supplies are disrupted due to the outbreak of war in the Persian Gulf. The government had also earlier asked crude oil producers ONGC and Oil India, and refiners IndianOil, Bharat Petroleum and Hindustan Petroleum to defer maintenance shutdowns by four months.

BSE code: 500104

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