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Brokerages retained their bullish view on Bharat Petroleum Corporation (BPCL) after the company on Monday said it will exit Numaligarh refinery in Assam by selling its entire stake to a consortium of Oil India and Engineers India for Rs 9,876 crore.

Shares of the oil marketing retailer traded 4.59% higher at Rs 475.80 at around 10.15 am (IST), while the benchmark BSE Sensex traded 538 points, or 1.08%, higher at 50,388.

While retaining a ‘Buy’ call on BPCL, Emkay Global Financial Services said, “The sale is an important milestone in BPCL’s disinvestment process, and cash proceeds may also be paid to BPCL shareholders as a special dividend of Rs 40-50 per share in the next 1-2 months,” the brokerage said. It has also fixed a price target of Rs 495 for BPCL.

The sale of Numaligarh Refinery clears the way for privatisation of India’s second-largest fuel retailer. In keeping with the Assam Peace Accord, the government had decided to keep Numaligarh Refinery Ltd (NRL) in the public sector. As part of this, BPCL was to sell its entire 61.65 per cent stake to state-owned firms.

A consortium of Oil India Ltd, Engineers India Ltd, and the Government of Assam expressed interest in buying the stake and the BPCL board on Monday approved the sale.

“The board of directors of BPCL at the meeting held on March 1, 2021, has approved the proposal for sale of entire equity shares of 445.35 crore held by BPCL in NRL to a consortium of OIL and EIL and to Government of Assam,” the firm said in a filing to the stock exchanges. Total consideration would be Rs 9,875.96 crore.

The consortium of OIL and Engineers India Ltd is likely to acquire 49% and the rest 13.65% will be sold to the government of Assam.

NRL operates a 3 million tonnes per annum oil refinery in Assam.

OIL currently holds 26 per cent equity in NRL while the Government of Assam has around 12.35 per cent.

Global brokerage firm CLSA also retained ‘Outperform’ rating a price target of Rs 450. “Media reports suggest the government aims to complete the privatisation process by July-August 2021, which should keep excitement high in the stock in the coming months,” CLSA said.