Apollo Global, I Squared Capital rival Vedanta for buying stake in BPCL

 

Vedanta currently holds a controlling stake in Cairn Oil & Gas, India's largest private sector crude oil producer, and maybe the keenest to diversify into the refining business.

Vedanta, Apollo Global, and I Squared Capital have responded to the Centre’s decision to shed its controlling stake in Bharat Petroleum Corporation (BPCL).

Vedanta currently holds a controlling stake in Cairn Oil & Gas, India’s largest private sector crude oil producer, and maybe the keenest to diversify into the refining business.

The acquisition would de-risk the group from crude oil price volatilities and also future proof it with a commanding interest in the petrochemical business.

But Vedanta promoter Anil Agarwal might not have a cake walk as both Apollo Global and I Squared Capital already have their fingers sunk deep into India’s energy ecosystem. Of the two, Apollo Global is clearly the much larger fish with assets worth $433 billion under its management, significantly overshadowing I Squared Capital’s $13 billion assets under management (AUM).

“Apollo is a major player with a $77 billion private equity portfolio, and an energy-savvy investor. Among its most notable investments, Apollo acquired LyondellBasell (Reliance Industries was also interested) under bankruptcy in 2009, which yielded six times returns when it exited in 2014 for $12 billion.

 I Squared, though smaller with $13 billion AUM, is also a focused player in energy and utilities, and has generated 30-40 per cent compound annual growth rate returns in certain investments in the sector,” Sabri Hazarika and Tanay Gabhawala of Emkay Global said in a joint note.