CONCOR, BPCL gain 8% as govt may complete PSU stake sale in 2019-20

Shares of Bharat Petroleum Corporation (BPCL) and Container Corporation of India (CONCOR) added more than 8 percent intraday on September 23 following reports that the government wanted to complete public sector units (PSUs) stake sale in the financial year 2019-20.

CONCOR and BPCL touched 52-week high of Rs 595.75 and Rs 447.85, respectively.

The government is aiming for Rs 50,000-60,000 crore revenue via privatisation during this financial year through investment by foreign companies in PSUs, CNBC-TV18 reported news agency Reuters as saying.

The prime minister’s office expressed reservations over sale of PSUs to other state-owned entities and wanted BPCL, CONCOR and Air India stake sale to be completed in 2019-20, it added.

Privatisation could be back on the table after 16 years and mark a big change in the government’s thought process, Ridham Desai, Managing Director at Morgan Stanley India, told CNBC-TV18. The move would improve funding for the government and also control fiscal deficit, he added.

Credit Suisse has maintained underperform rating on BPCL but raised target to Rs 320 from Rs 300 per share on the back of benefits from the corporate tax cut.

However, the high capex cycle was still leading to a debt increase. It raised FY21 & FY22 EPS by 12 percent and that for FY20 at 32 percent.

At 1510 hours, Bharat Petroleum Corporation was quoting at Rs 446, up Rs 42.35, or 10.49 percent, and Container Corporation of India was quoting at Rs 579.35, up Rs 30.10, or 5.48 percent.

Source : http://tiny.cc/hxh8cz

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