Rumours on why BPCL and HPCL sell-off stalled

Vol 6, PW 16 (09 Oct 02) News in Brief

If you believe rumours, there are several good reasons why the privatisation of Bharat and Hindustan Petroleum has stalled.

One rumour suggests politicians with heaps of undeclared cash have engineered the delay to drive down the share price of both companies to about Rs140 from the current Rs206. When the stock hits this level, watch out for pro-privatisation statements that will push share prices higher.

By this time the politicians will have invested heavily in both companies. When share prices peak, they will sell their shares and make a neat profit.

The other rumour is that Reliance wants to buy one of the two oil PSUs but is short of cash and wants the process slowed down till it can find the money. A third rumour is that the ruling BJP does not want privatisation to become an election issue ahead of crucial state elections next year and parliamentary elections in 2004.