Description

Castrol India Limited announces that its ultimate holding company BP p.l.c. has reached an agreement to sell 65% shareholding in Castrol to Stonepeak at an enterprise value of $10 billion, with transaction expected to complete by end of 2026.

Summary

Castrol India Limited has informed BSE and NSE pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, about a press release issued by its ultimate holding company BP p.l.c. on December 24, 2025. BP has reached an agreement to sell a 65% shareholding in Castrol to Stonepeak at an enterprise value of $10 billion. The transaction will result in the formation of a new joint venture with 65% Stonepeak and 35% BP ownership, with BP retaining optionality to sell its remaining 35% stake after a two-year lock-up period. The transaction is expected to complete by end of 2026, subject to regulatory approvals.

Key Points

  • BP p.l.c. (ultimate holding company of Castrol India Limited) has agreed to sell 65% shareholding in Castrol to Stonepeak
  • Enterprise value of the transaction is $10 billion (implied EV/LTM EBITDA of around 8.6x)
  • Implied total equity value of Castrol is $8.0 billion after deducting JV minority interests totaling $1.8 billion and other debt-like obligations of around $0.3 billion
  • Total net proceeds to BP approximately $6.0 billion, including around $0.8 billion for pre-payment of future dividend income on BP’s retained 35% stake
  • BP will fully utilize proceeds to reduce net debt
  • A new joint venture will be incorporated with 65% Stonepeak and 35% BP ownership
  • Castrol has demonstrated nine consecutive quarters of year-on-year earnings growth
  • A significant proportion of Castrol JV minority interests relate to the shareholding in publicly listed Castrol India Limited
  • BP will have a two-year lock-up period on its retained 35% stake, after which it has optionality to sell
  • Transaction accelerates delivery of BP’s reset strategy to simplify portfolio, strengthen balance sheet, and focus downstream on leading integrated businesses

Regulatory Changes

No regulatory changes announced. This is a disclosure made under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, regarding material events at the ultimate holding company level.

Compliance Requirements

  • Castrol India Limited has complied with Regulation 30 disclosure requirements by informing stock exchanges about the press release from ultimate holding company
  • Transaction will require regulatory approvals before completion
  • Given that Castrol India Limited is publicly listed and forms a significant proportion of Castrol JV minority interests, further disclosures and approvals may be required as the transaction progresses

Important Dates

  • December 24, 2025: Press release date and disclosure to stock exchanges
  • End of 2026: Expected transaction completion date (subject to regulatory approvals)
  • Two years post-completion: End of lock-up period for BP’s retained 35% stake

Impact Assessment

High Impact on Castrol India Limited and stakeholders:

  • Ownership Structure: The transaction will fundamentally alter the ownership structure of the Castrol group, with Stonepeak becoming the majority 65% owner and BP retaining 35%
  • Listed Entity Implications: As Castrol India Limited represents a significant proportion of Castrol JV minority interests and is publicly listed on BSE (scrip code 500870) and NSE (symbol CASTROLIND), shareholders need to monitor developments closely
  • Strategic Direction: The new joint venture structure may lead to changes in strategic direction, management approach, and business priorities
  • Future Uncertainty: BP’s optionality to sell its remaining 35% stake after two years creates potential for further ownership changes
  • Valuation Signal: The enterprise value of $10 billion and 8.6x EV/LTM EBITDA multiple provides a valuation benchmark for the Castrol business
  • Growth Trajectory: The transaction is based on Castrol’s strong performance (nine consecutive quarters of earnings growth), which may influence market perception
  • Regulatory Process: The transaction timeline extending to end of 2026 indicates a complex regulatory approval process that may involve multiple jurisdictions and authorities
  • Dividend Policy: Pre-payment of $0.8 billion in future dividends to BP may impact dividend flow to minority shareholders in the near to medium term

Market participants should monitor subsequent disclosures regarding regulatory approvals, shareholder approvals, and any changes to management or business strategy of Castrol India Limited.

Impact Justification

Major corporate restructuring involving sale of 65% stake in Castrol by ultimate holding company BP to Stonepeak at $10 billion enterprise value, creating new joint venture structure that will significantly impact Castrol India Limited's ownership and governance structure