Lok Sabha Question No. 221 (UNSTARRED), answered on 2021-07-19
Subject: BPCL Dividend
Ministry: FINANCE
Asked by: Abdul Majeed Ariff, Amar Singh, Behanan Benny

## GOVERNMENT OF INDIA

## MINISTRY OF FINANCE

## DEPARTMENT OF INVESTMENT AND PUBLIC ASSET MANAGEMENT

## LOK SABHA

## UNSTARRED QUESTION NO. 221

## TO BE ANSWERED ON MONDAY, JULY 19, 2021

Ashadha 28, 1943 (Saka)

## BPCL Dividend

## 221.  ADV. A.M. ARIFF: DR. AMAR SINGH: SHRI BENNY BEHANAN:

Will the Minister of FINANCE be pleased to state:

- (a) the annual dividend from the Bharat Petroleum Corporation Limited (BPCL) during the last ten years;
- (b) the projected annual dividends and other receipts from BPCL for the next ten years;
- (c) the  current  valuation  (s)  of  BPCL  by  the Government, employee unions, and any other stakeholders;
- (d) whether  the  Government  is  taking  any  steps  to  ensure  proper  price  discovery  in  the valuation process for BPCL and if so, the details thereof; and
- (e) whether  the  expected  receipts  from  disinvestment  exceed  the  projected  receipts  from dividends by BPCL and if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE IN MINISTRY OF FINANCE

## (DR. BHAGWAT KISHANRAO KARAD)

(a)  &  (b):  Annual  dividend  received  from  BPCL  by  the  Government  in  last  10  years  is annexed. BPCL is a listed Maharatna company, in which Government is the promoter and holds 52.98% equity shares, while the balance shares are held by other public shareholders. Under the Companies Act, 2013, the decision with regard to the declaration of dividend is based on the recommendations of the Board of Directors of the company, which is contingent on  various  factors  such  as  profit  for  the  financial  year,  availability  of  cash,  extent  of borrowing, and future capital expenditure plans, etc. Profitability in Oil Marketing sector, in general,  is  dependent  upon  international  crude prices,  demand  for  fossil  fuels  and  growing use  of  alternative  global  clean  energy  sources,  etc.  The  amount  of  final  dividend  as recommended by the Board of the Directors is considered and approved by the shareholders in the Annual General Meeting.  Considering this, no projections for the future Dividend pay out by the Company can be made by the Government.

The other main receipts are in the nature of direct and indirect taxes, the incidence of which does not depend upon the ownership of the Company.

(c) & (d): As per the extant procedure, the valuation made by the independent valuers appointed by the Government is considered for the fixation of Reserve Price only.  In order to ensure  non-collusive  competitive  bidding,  confidentiality  is  maintained  with  regard  to  the valuation exercise and the independent valuers are bound by a Confidentiality Undertaking. The  Valuation,  however,  provides  inputs  for  fixation  of  Reserve  Price,  while  the  price discovery is a product of competitive bidding.  The process of financial bidding is guided by the principles of transparency, fair play, promoting competition and ensuring highest degree of integrity and probity. The Reserve Price is arrived at through a well-defined due process only after the financial bids have been received which are kept in sealed cover till the reserve price is determined.

(e): The  quantum  of  disinvestment  receipts  from  BPCL  will  be  known  only  after  the successful completion of the transaction, based on the price discovery through competitive bidding.

## Annexure to Lok Sabha Unstarred Question No. 221 for reply on 19-07-2021

## Annual dividend received by the Government from BPCL for last ten years

| Year    | Annual Dividend (Rupees in crore - rounded off)   |
|---------|---------------------------------------------------|
| 2019-20 | 2,821                                             |
| 2018-19 | 2,091                                             |
| 2017-18 | 1,729                                             |
| 2016-17 | 3,098                                             |
| 2015-16 | 1,529                                             |
| 2014-15 | 675                                               |
| 2013-14 | 437                                               |
| 2012-13 | 218                                               |
| 2011-12 | 278                                               |
| 2010-11 | 278                                               |