The scrip price of Reliance Petroleum (RPL) rose on the news that the government has debarred Indian Oil Corporation (IOC) from bidding for Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd, thus strengthening the company's candidature.
The stock of the largest private sector oil refiner in the country jumped 5.76 per cent to Rs 28.45 on the Bombay Stock Exchange. The stock had witnessed a loss on Tuesday following the news that it had lost out to IOC in acquiring IBP. Around 64.44 lakh shares were traded on the BSE.
The recovery in the counter of the crude oil refining company comes barely after the scrip plunged (on Tuesday) on heavy volumes.
The fall yesterday was as a result of the disappointment over the companies failing in their bid for IBP. IOC was selected as the successful bidder for the government's 33.6 per cent stake in the stand-alone marketing firm. The RPL scrip plunged 4.27 per cent to Rs 26.90 on a volume of 1.17 crore share on Tuesday.
The scrip currently trades near its 52-week low and is off sharply by 58.9 per cent from its 52-week high of Rs 68.75 achieved on 13 February 2001.
The government's announcement yesterday that it will privatise BPCL and HPCL within three months since dismantling the administered price mechanism in the oil sector scheduled for 1 April 2002 has brought fresh lease of life to the RPL counter.
What came as a major booster, however, was the government's announcement that IOC would be barred from bidding for both BPCL and HPCL. RPL sees its candidature considerably strengthened as a result of this.
If RPL does manage to acquire stake in either BPCL or HPCL or both , it will have entered the high profile petroleum marketing sector what with the strong marketing networks of BPCL and HPCL.
HPCL and BPCL have outlets of 4,600 and 4,489 respectively. Compared to IBP, which controls 10-35 per cent of its retail outlets, BPCL and HPCL control about 60 per cent of its outlets.
