Shares of Castrol India rose by 12% on March 6, which was their highest single day rise in the last eight months, after it was reported that Saudi Aramco is planning to place a bid for BP’s lubricant assets. According to the report, Aramco is currently assessing the possibility of acquiring part or the entire Castrol’s business with an aim of enhancing its presence in growing markets especially in India.
The state owned oil company of Saudi Arabia, Aramco, after its purchase of Valvoline’s lubricants business in 2023 for $2.65 billion, may be planning to combine Castrol’s assets with its current operations. As of 12:40 pm, Castrol India’s shares were seen trading at Rs 248, touching the close proximity to its 52 weeks high of Rs 284. The company’s market capitalization, however, is Rs 23,600 crore.
BP started a strategic review of Castrol, its lubricants business in September this year in order to increase value and divest a part of the stake to enhance its financials. Castrol brand covers over 150 countries and offers lubricants for automotive, marine, industrial and energy applications. It has also started selling liquid cooling technology for data centers not long ago.
Aramco is looking for acquisitions in the refining and chemicals sector in Asia, and Castrol India, having a robust market position, can be a strategic buy for the future.
