BPCL disappoints on dividend; focus shifts to disinvestment

Shares of Bharat Petroleum Corp. Ltd (BPCL) have corrected more than 5% in the last two trading sessions. Analysts attribute this to investors’ disappointment with the latest dividend. The Street was banking on a generous dividend payout after BPCL’s recent asset sales.

BPCL had approved the divestment of its entire 61.65% stake in Numaligarh Refinery Ltd (NRL) for ₹9,876 crore to a consortium of Oil India Ltd, Engineers India Ltd and the Assam government. It also sold treasury shares of over ₹5,000 crore held by the BPCL Trust.

The company has, however, chosen to declare an interim dividend of ₹5/equity share, totalling a payout of around ₹1,100 crore. Of course, part of the proceeds of the NRL divestment was meant to be used to buy an equity stake in Bharat Oman Refineries Ltd ( ₹2399.6 crore for 36.62% stake sale).

Nevertheless, even after adjusting for this, investors received a dividend of up to ₹21 a share. The company still has enough cash in hand, say analysts.

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