BPCL to Offer 80 Lakh Shares in Block Deal
State-owned Bharat Petroleum Corporation Ltd (BPCL) is set to offer approximately 80 lakh shares worth an estimated ₹450-500 crore through a block deal, according to a recent report by CNBC Awaaz. This strategic move by BPCL involves the BPCL Trust for Investment divesting a portion of its shares through this transaction. The final decision regarding the size and price of the block deal will be jointly made by government officials and BPCL.
Understanding BPCL’s Financial Performance:
Recently, BPCL reported a decline in net profit by 60% to ₹3,397 crore from ₹8,501 crore quarter-on-quarter, which fell short of the estimated ₹3,677 crore. Despite this, the calculated gross refining margin (GRM) for the quarter stood at $13.3 per barrel, surpassing estimates of $11.7 per barrel. Additionally, the refining throughput of 9.86 MMT exceeded the CNBC-TV18 poll of 9.5 MMT.
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However, the earnings before interest, tax, depreciation, and amortization (EBITDA) halved compared to the September quarter, dropping 52% to ₹6,225 crore from ₹12,908 crore. The EBITDA margin for the quarter also saw a decline to 5.4% from 12.5% last quarter, falling short of expectations of 6.5% from a CNBC-TV18 poll.
Market margins also witnessed a change, with the blended retail margin for petrol and diesel standing at ₹2.8 per litre during the quarter. Marketing margin decreased to ₹4,009 from ₹5,598 in the September quarter, as per brokerage firm ICICI Securities.
Insights into Block Deals:
Block deals, characterized by the sale or purchase of a substantial number of shares in a single transaction, are often utilized by companies aiming to raise capital or streamline their shareholding structure. In this case, BPCL’s decision to offer 80 lakh shares through a block deal reflects its strategic financial planning.
Market Response and Closing Figures:
Following the announcement, BPCL’s shares concluded trading at ₹584.25, marking a decline of ₹6.30 or 1.07% on the BSE. Over the last six months, the company’s shares have surged nearly 65%.
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Financial Performance Overview:
In the third quarter, BPCL recorded a 73% increase in net profit, attributed to strong refining and marketing margins. The company’s standalone net profit rose to ₹3,393 crore in the three months ended December 31, up from ₹1,960 crore a year earlier. Despite revenue from operations remaining relatively unchanged at ₹1.3 lakh crore, expenses witnessed a decline of 4.5%.
BPCL’s average gross refining margin stood at $13.3 per barrel during the December quarter, demonstrating resilience amidst market fluctuations.
Implications of the Block Deal:
The decision by BPCL to offer 80 lakh shares through a block deal has significant implications for the company’s financial structure and market positioning. This move underscores BPCL’s commitment to strategic financial planning and optimizing its shareholder value.
Stay Informed:
Stay tuned for further updates on BPCL’s block deal and its implications on the market landscape. As BPCL navigates through these strategic maneuvers, it continues to shape the trajectory of India’s energy sector.
By staying informed about developments in the energy industry, investors and stakeholders can make informed decisions and navigate market fluctuations effectively.
