Russian oil big PJSC Rosneft Oil Firm has initiated preliminary discussions with Reliance Industries (RIL) for the sale of its 49.13 p.c stake in Nayara Power, which operates a 20-million tonnes-per-year oil refinery and 6,750 petrol pumps throughout India, PTI reported citing sources. A possible acquisition might place Reliance as India’s high oil refiner, surpassing state-run Indian Oil Company (IOC), and considerably increase its presence within the nation’s gas retailing market.
Nevertheless, the negotiations stay at an early stage, and there’s no certainty they’ll culminate in a deal as valuation variations persist, three sources with direct information of the matter mentioned.
Rosneft executives have visited India no less than 3 times over the previous yr, holding talks in cities together with Ahmedabad and Mumbai with potential buyers.
Western sanctions have hindered Rosneft’s means to repatriate earnings from India, prompting its choice to hunt an exit from Nayara. An appropriate purchaser, the sources mentioned, would ideally have important abroad income streams, enabling fast cross-border payouts for the stake.
“As a coverage, we don’t touch upon media hypothesis and rumours. Our firm evaluates varied alternatives on an ongoing foundation. We now have made and can proceed to make essential disclosures in compliance with our obligations below Securities Alternate Board of India (Itemizing Obligations and Disclosure Necessities) Laws 2015 and our agreements with the inventory exchanges,” a RIL spokesperson instructed PTI.
Rosneft had acquired Essar Oil, later renamed Nayara Power, in 2017 for $12.9 billion however has struggled to extract full monetary advantages resulting from sanctions. The Russian main determined to exit Nayara in 2024, with UCP Funding Group additionally promoting its 24.5 p.c stake. Nayara’s different main stakeholder, Trafigura Group, holds 24.5 per cent and will exit if a deal materialises, sources mentioned.
Rosneft and UCP have provided their stakes to Reliance, Adani Group, Saudi Aramco, and the ONGC/IOC mix, however the $20-billion valuation has been deemed extreme by most. Adani opted out, citing each valuation considerations and current commitments with TotalEnergies that restrict its fossil gas investments to pure gasoline.
Saudi Aramco stays a severe contender, searching for downstream property in India, although it too considers the $20-billion price ticket steep.
Nayara’s acquisition would give Reliance, which already operates 68.2 million tonnes of refining capability at Jamnagar, a complete capability surpassing IOC’s 80.8 million tonnes and a stronger foothold in gas retailing.
ONGC and IOC worth Nayara’s advertising community at not more than $2.5-3 billion and its refinery equally. For Reliance, the advertising community alone could possibly be price round $5.5 billion, with refinery synergies probably including $5 billion in worth, sources added.
Rosneft has reportedly lowered its valuation to $17 billion, but this stays above what many potential patrons are keen to pay. No formal settlement has been reached, and Rosneft has not issued any official assertion confirming a sale.
(With inputs from PTI)
