The government has sweetened the BPCL privatisation offer by tweaking the foreign direct investment policy to allow 100 per cent ownership of a state-owned refinery by global players through the automatic route.

The cabinet has approved the proposal to allow 100 per cent foreign direct investment in state-run refineries in which a strategic stake sale is announced, officials said.

Mining-to-oil conglomerate Vedanta and US-based private equity firms Apollo Global and I Squared Capital’s arm Think Gas are in the race to buy the government’s stake in BPCL.

The government at present allows 49 per cent FDI through the automatic route in petroleum refining PSUs, while permitting 100 per cent FDI through the automatic route in the private sector.

The officials clarified the limit will stay at 49 per cent for refiners not lined up for asset sales.

The winning bidder for the government’s 52.98 per cent stake in BPCL will have to make an open offer to buy an additional 26 per cent stake from other shareholders at the same price according to the takeover rules.

The Centre has approved the sale of its entire 52.98 per cent shareholding in BPCL, along with the transfer of management control to a strategic buyer.

Specialty steel incentives

The cabinet also approved a Rs 6,322-crore production linked incentive (PLI) scheme for specialty steel.

Under the scheme, valid from 2023-24 to 2027-28, eligible producers will get a 4 per cent to 12 per cent incentive on the incremental production.

The government expects the scheme to add 25 million tonnes (mt) to the existing capacity and bring investments of Rs 40,000 crore.

“We shall consider the scheme while deciding our next capex cycle and product-mix,’’ according to SAIL chairman Soma Mondal. T.V. Narendran, CEO & MD, Tata Steel, said the PLI scheme “will boost investment in the high grade steel sector and drive global competitiveness of the Indian manufacturers. The scheme will provide an added advantage to our future plans where value-added products will be a major focus”.

“Most of the imports into India are in the value-added and specialty segment. The PLI scheme will boost manufacturing capacities by Indian mills in this segment and MSMEs will be able to source from them directly. JSPL will definitely register for this scheme,” V.R. Sharma, MD of JSPL, said.

Bhaskar Chatterjee, secretary-general of the Indian Steel Association, said: “This scheme will play a pivotal role in enabling growth by promoting investments for the steel industry.”