BPCL dividend per share: BPCL shares in high demand on likely large dividend payout

MUMBAI: Investors lapped up shares of state-owned Bharat Petroleum Corporation () on Thursday after the company said it will decide on a final dividend on May 26. Analysts said expectations are high that the oil marketer and refiner, which is high on government’s privatisation list, could announce a large dividend as the company is sitting on cash it received from the sale of its assets.

BPCL shares rose 2.1% to Rs 455.80 on Thursday. About 99 lakh shares were traded on both the bourses on Thursday which is 27% higher than the previous 10 days average. BPCL has received ₹9,876 crore from the sale of Numaligarh Refinery (NRL) in Assam to a consortium of Oil India and Engineers India. Also in March, BPCL sold treasury shares worth ₹5,500 crore of the company. Later, it acquired Oman Oil’s 36.62% stake in Bina refinery for ₹2,400 crore.

Analysts said BPCL’s net cash after the recent three deals would be around ₹13,100 crore and if the company were to distribute entirely as a dividend, it would work out to be ₹55 per share.

In March, the company had disappointed investors after it announced a dividend of ₹5 per share after the sale of the assets, resulting in a sell-off in the shares.

“As NRL stakes sale gets completed, we see the possibility of a one-time special dividend as the recent dividend declaration of ₹5 per share was lower than the inflow from the sale of treasury shares of ₹5,600 crore,” said Yogesh Patil, analyst, Reliance Securities. Shares of BPCL have gained 11.4% in the last one month.

Harshvardhan Dole, an analyst with IIFL too believes that BPCL likely to distribute the proceeds it received from the NRL sale as special dividend. That could amount to ₹49 per share.

Analysts said technical indicators are pointing to fresh upsides for BPCL.

“The stock is taking support near to ₹439 zone from last two weeks while a decisive hold above Rs 468 could see a fresh leg of rally towards ₹500 zone,” said Chandan Taparia, derivatives & technical analyst, Motilal Oswal Financial Services.

The big trigger for BPCL shares however remains to be its privatization. The government could try to finish off the sale by October, analysts said.

“Privatisation of 56% of holding of in BPCL is likely to be sold in the open offer by the successful bidder at ₹609 per share based on 8 times FY22 EV/EBITDA and balance shares at Rs 462 per share based on 6 times FY22 estimate EV/EBITDA,” said Vidyadhar Ginde, analyst, ICICI Securities.