Castrol India’s stock shot up around 9% on Wednesday, reaching a high of ₹202.40 after BP announced it will sell a 65% stake in its parent company, Castrol Ltd, to the investment firm Stonepeak.
What the Sale Means
BP plans to receive roughly $6 billion from the deal, which is expected to close by the end of 2026 pending regulatory approval. The transaction values Castrol at about $10.1 billion, implying a strong earnings multiple and highlighting the business’s growth potential.
Impact on Castrol India
Castrol India, which holds a 51% stake in the listed Castrol India Limited, saw its shares rise sharply despite a recent dip of about 0.25% over the past year. The stock is still trading below its 200‑day simple moving average of ₹206, suggesting room for further movement.
Key Details of the Deal
- BP retains a 35% interest in Castrol after the sale, giving it continued exposure to the brand’s growth.
- A two‑year lock‑up period will apply before BP can consider selling its remaining stake.
- The transaction will help BP fund its broader strategy to simplify its portfolio and strengthen its balance sheet.
- Stonepeak will own 65% of the newly formed joint venture that will run Castrol’s downstream businesses.
Why It Matters for Investors
The sale signals confidence in Castrol’s long‑term prospects and could lead to better financial performance for the Indian subsidiary. Investors may see the stock’s recent bounce as a sign of renewed interest, but they should also watch how the new joint venture shapes Castrol India’s operations.
Disclaimer
Remember, this is perspective, not prediction. Do your own research and consider your risk tolerance before making any investment decisions.