IndianOil gets IBP, Tatas bag VSNL

Our Convergence Bureau
05 February 2002

New Delhi: The much-sought after government stakes in the petroleum retail chain IBP and the telecom giant VSNL were sold to Indian Oil Corporation and the Tata group for Rs 25.93 billion on 5 February.

While IndianOil bought 33.58 per cent of the governments stake in IBP for Rs 11.54 billion against the reserve price of Rs 3.37 billion, the Tatas bought a 25 per cent stake in VSNL for Rs 14.39 billion against the reserve price of Rs 12.18 billion.

In IBPs case, the second bidder Royal Dutch Shell quoted a price of Rs 5.95 billion. Kuwait Petroleum, Hindustan Petroleum and Bharat Petroleum were the other IBP bidders. By acquiring IBP, which has over 1,500 retail outlets, IOCs share in the petroleum market will go up to 61.6 per cent.

The Reliance group, which was a serious contender for VSNL, lost the race to the Tatas, as the Ambanis had quoted Rs 13.47 billion. The Tatas and Reliance were the only two bidders for 25 per cent of the governments 53-per cent stake in VSNL, whose monopoly over overseas communication is slated to end on 31 March 2002.

"We at VSNL are happy to work under a professional group such as the Tatas," says VSNL chief general manager (public relations) G C Banik. While expressing its happiness in winning the bid, the Tata group, through a press release, congratulated the department of disinvestments for conducting the entire divestment process in a professional and transparent manner.

The Tata group offers basic telephony services in Andhra Pradesh and has secured licences for Delhi, Gujarat, Karnataka and Tamil Nadu. It is a major player in wireless telephony through its investment in Birla-Tata-AT&T combine and the pending merger with BPL the footprint of both these companies covers the states of Delhi, Madhya Pradesh, Chattisgarh, Gujarat, Maharashtra, Goa, Andhra Pradesh, Tamil Nadu and Kerala, as well as the city of Mumbai.