Mukesh Ambani led Reliance Industries is eying a potential bid for a controlling stake in Nayara Energy, which is a Rosneft-backed company. The richest Indian’s group is also trying to include its refining assets on India’s west coast in the deal, reported Energy Intelligence.
According to The Economic Times report, Rosneft and UCP Investment Group, which are Nayara’s stakeholders, have reportedly engaged in talks with Indian businesses like Reliance Industries, Adani Group, and JSW Group. Senior Rosneft executives visited Delhi in March to discuss the matter with officials.
Saudi Aramco has also been involved in discussions. The Saudi oil giant has previously shown interest in India’s refining sector.
Rosneft, Russia’s largest oil company, is reportedly looking to sell its 49.13% stake in Nayara Energy, which was acquired in 2017 for $12.9 billion by them. Sanctions imposed by the US and EU since 2014 have impacted Rosneft’s earnings from Nayara Energy.
The valuation of Nayara Energy is around at $20 billion, though discussions with Indian corporates are in early stages, and a deal is uncertain.
UCP Investment Group, which owns 24.5% of Nayara Energy, is also looking to divest its stake. The group’s valuation is at over $5 billion, as reported by The Economic Times.
Following the 2017 acquisition, Rosneft held 49.13% ownership, while Trafigura Group and UCP each retained 24.5%.
While Nayara Energy has attracted interest, some Indian firms have reportedly declined to pursue the acquisition due to low returns on investment., significant capital infusion requirements and over complexities arising from sanctions on Russian entities.
Nayara Energy handles India’s second-largest refinery in Gujarat, and is the country’s largest private fuel retailer, with over 6,500 outlets nationwide.
