Castrol India Share Price Rises As Saudi Aramco Looks To Pick Up Stake

Castrol India Ltd.'s share price surged over 13% as Saudi Aramco is reportedly considering a potential offer for lubricant assets being sold by BP Plc.

Saudi Aramco, the world’s largest energy company, is exploring the possibility of bidding for part or all of BP’s lubricant business, which operates under the Castrol brand name, Bloomberg reported.

This move is part of Aramco’s strategy to expand its presence in oil-consuming countries. If successful, Aramco could integrate the Castrol assets with its Valvoline lubricants unit, which it acquired for $2.65 billion in 2023.

BP is undergoing a major corporate restructuring and has initiated a strategic review of its Castrol lubricants business. According to Bloomberg, this business could be valued at around $10 billion. Aramco is particularly interested in Castrol’s operations in fast-growing markets like India. Castrol India Ltd., listed on the Indian stock exchanges, has a market value of approximately $2.5 billion.

The potential acquisition seems to have sparked investor interest, leading to a significant rise in Castrol India’s share price.

Shares of Castrol India rose as much as 13.32% to Rs 251.95 apiece. It pared gains to trade 10.87% higher at Rs 246.50 apiece, as of 12:38 p.m. This compares to a 0.48% advance in the NSE Nifty 50.

The stock has risen 17.30% in the last 12 months. Total traded volume so far in the day stood at 7.8 times its 30-day average. The relative strength index was at 78.

Out of four analysts tracking the company, three maintain a 'buy' rating, and one recommends a 'hold', according to Bloomberg data. The average 12-month analysts' consensus price target implies a downside of 6.3%.