In a move to sweeten the deal for bidders of sale-bound BPCL, the Union cabinet is likely to tweak the foreign direct investment (FDI) policy to allow 100 per cent ownership of the state-owned refinery by global players through the automatic route.

Officials said the matter could be taken up by the cabinet at its meeting on Tuesday, which could send a positive signal to investors and fasttrack the privatisation of the state-owned refiner.

According to the existing FDI policy, up to 49 per cent FDI is permissible through the automatic route in petroleum refining PSUs, without any disinvestment or dilution of domestic equity in existing PSUs by the government. However, the policy allows for 100 per cent FDI through the automatic route in petroleum refining in the private sector.

The limit of 49 per cent, however, remains for refining PSUs that have not been lined up for divestment, the officials said.

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.

Petroleum minister Dharmendra Pradhan has said the government received three preliminary bids for the acquisition of a controlling stake in BPCL. Anil Agarwal’s Vedanta group and two American funds — Apollo Global and I Squared Capital — have reportedly submitted expressions of interest.

Several rounds of discussions have taken place among the divestment department, department of economic affairs and the trade and industry ministry — who have all agreed on the proposal to issue the clarification.

For the quarter ended March 31, 2021, BPCL had reported a net profit of Rs 11,940.13 crore. It had posted a loss of Rs 1,361.01 crore in the year-ago period.

The state-owned refiner had reported a 610 per cent increase in net profit to Rs 19,041.67 crore in the financial year 2020-21 against a net profit of Rs 2,683.19 crore in the previous fiscal.

The government has lined up a host of companies for divestment, including the strategic sale of Bharat Petroleum, Air India and Shipping Corp of India Ltd and initial public offering of Life Insurance Corp of India Ltd.

Besides the BPCL exercise, Air India has reportedly received multiple bids, including from the Tatas.

The listing of LIC is also likely to be pushed back to the second half of the year because of the insurance behemoth's valuation, which involves the sales of its real estate and art assets.