BPCL was in the limelight today on good buying support  following reports that the government is likely to appoint advisors by the end of the current month for divestment of its stake in the company.

The company's scrip was up by 2.38% at Rs 249.30 on the BSE in the afternoon trades, but  off its high of Rs 251. Over 1.46 lakh shares  changed hands on the counter by 13:20 IST.

Dealers said the buying support for the Bharat Petroleum Corporation (BPCL) scrip was  purely on reports that government will appoint an advisor  for the sell-off by 30 May 2003.

According to the reports, the government plans to appoint two global co-ordinators who will advise the government on the proposed American Depository Receipt (ADR) and domestic offer. The investment bankers are  required to give appropriate underwriting to the domestic and ADR issues.

The global co-ordinators will advise on all aspects of the two issues, complete the due diligence, draft offering documents, red herring prospectus as well as  conduct pre-market survey, road shows, book- building and generate interest from prospective investors.

The government has planned a initial public offer (IPO) as well as ADR issue involving 35.2% stake, while 5% will be reserved for company employees. The government will retain 26%.

The latest reports on BPCL also improved the sentiment for the stocks of other state-run companies on the hopes that the government's divestment programme may gather pace. SCI (up 5.08% to Rs 74.50), Nalco (up 3.76% to Rs 91), HPCL (up 0.89% to Rs 290) and Madras Fertilisers (up 3.78% to Rs 12.35) were some of the gainers among PSU stocks.

Meanwhile, dealers said the government is facing too many obstacles in the divestment of state-run refineries. The strong resistance from Opposition parties as well as some members of the ruling National Democratic Alliance in the backdrop of the forthcoming general elections may force the government to put off the disinvestment agenda, they added.

Earlier, there were reports that the Supreme Court (SC) had issued a notice to the Centre over the proposed disinvestment in state-run oil refiners.

The notice followed a public interest litigation filed with the SC by the Centre for Public Interest Litigation (CPIL) terming the disinvestment as illegal. CPIL contended that the government's decision to divest stake in HPCL and BPCL did not have parliamentary approval.

HPCL and BPCL, which together command a 40-45% market share for petroleum products, were nationalised through an Act of Parliament in the 1970s and CPIL urged that disinvestment in these two companies could be done either by repealing or amending the acquisition Acts concerned.

BPCL has about 4,500 retail outlets and a 20% share in the petroleum products market. As per recent reports, BPCL plans to double its refining capacity to 2,40,000 bpd from the current 1,30,000 bpd by October 2004, and modify its refineries so that it can process different grades of oil.

The total cost of the expansion and modernisation is estimated at Rs 1,831 crore, of which Rs 1,200 crore has already been spent.

For the third quarter ended 31 December 2002, BPCL recorded a net profit of Rs 233 crore, up 224%, over the Rs 71.90 crore it registered in the corresponding period of the previous year. Net sales increased by 29% to Rs 12,645.2 crore from Rs 9,801.1 crore in DQ 2001.