With the economic disruption caused by the Covid-19 pandemic on the wane, the Indian government is now reviving its plan to sell off some state-owned industries to trim expenses.

In the Union Budget for 2020-21, the government has set up an ambitious target to sell assets worth 2.1 trillion rupees (US$28.17 billion) before March 31, 2021. The prominent state-owned firms include Bharat Petroleum Corp Ltd, the country’s second-largest oil refining and marketing company, and airline Air India.

Bharat Petroleum operates four refineries in Mumbai (Maharashtra state), Kochi (Kerala), Bina (Madhya Pradesh) and Numaligarh (Assam) with a yearly combined capacity of 38.3 million tonnes, which is 15.3% of India’s total refining capacity of 249.8 million tonnes. The company also enjoys a 22% market share in the country’s fuel retailing network.

The government has extended the last date for preliminary expressions of interest for Bharat Petroleum four times. The deadline for the latest one ends on November 16 and the government indicated last month that it won’t be extended.

The government owns a 52.98% stake in Bharat Petroleum, while the rest is owned by foreign portfolio investors, BPCL trust for investing in shares, mutual funds, insurance companies and individual shareholders.

However, with the depletion of demand for conventional fuels due to the pandemic and the overall shift toward electric mobility and clean energy fuels like hydrogen, industry experts feel some of the global oil majors may keep away, the Press Trust of India reported.

When the government approved the sale of its stake in November last year, there were reports that UK’s BP Plc, Total of France, Russian energy giant Rosneft and Saudi Aramco may be interested.

The other likely bidders are Reliance Industries, Abu Dhabi National Oil Co and mining billionaire Anil Agarwal. Reliance operates an oil refining complex at Jamnagar in Gujarat and a Bharat Petroleum acquisition could help the company jump-start its fuel retail business.

The asking price of $10 billion may appear steep for prospective buyers and the uncertain demand for conventional fuel may make them think twice about the deal. The buyer will have to pay for the government’s stake and buy an additional 26% stake from the public, which at the current share price amounts to almost 700 billion rupees ($9.39 billion).

As Bharat Petroleum makes an annual profit of about 80 billion rupees, it may take 8-9 years for the investor to recover the bid amount. The company has a 12,000 strong employee base and for prospective buyers trimming the headcount could pose a challenge due to India’s tough labor laws.

In the case of Air India, the government has extended the deadline of expressions of interest to December 14 from October 30. The deadline has been extended several times this year amidst industry disruption caused by the Covid-19 pandemic.