The government's effort to push sale of equity in oil public sector units by earmarking five per cent shares each in Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited for employees may give them a bonanza of up to Rs 1,000 crore (Rs 10 billion) over the next 6-8 months when the two companies are privatised.

Over 24,000 employees would be entitled to a total of about three crore and twenty lakh shares in the two PSUs and going by the present market rate alone could mean a benefit of about Rs 550 crore (Rs 5.5 billion) for them, sources associated with the divestment process said.

Market anayalsts, however, pointed out that value of HPCL shares was expected to rise significantly as the process of its privatisation through sale of 34 per cent government equity to strategic partner advances while citing the example of IBP which was bought by strategic partner IOC at the rate of over Rs 1,000 a share.

As per the Cabinet Committee on Divestment decision, employees would get the share at one third of the average market price or the price at which strategic partner buys the stake (whichever is lower) in case of HPCL, sources said.

Divestment ministry officials would soon talk to the unions of the two corporations and would explain the benefits they could accrue by cooperating in the divestment process, sources said.

Sources, however, said that the HPCL employees would be a greater beneficary of the stock option vis-a-vis those in BPCL where the value of the shares may not appreciate so much as the government was going for divestment in the corporation through a public offer route.

At five per cent, about 11,500 employees in HPCL would get around 1.7 crore (17 million) shares of the total 34 crore (340 million) shares of the oil PSU, sources said pointing out that even at the current market price of around Rs 300 a share the employees stand to gain Rs 350 crore when they get concessional offer.

The benefit could even double when the prices of HPCL stock moves up in anticipation of open offer which new acquirer of the company would have to mandatorily make, they added.

In the case of BPCL, about 12,600 employees are expected to be offered 1.5 crore (15 million) shares, in lieu of five per cent of equity of the 30 crore (300 million) shares the company has, they said.

Considering that BPCL shares have been ruling at about Rs 194.8 per share, at one-third of the price, the employees would approximately be shelling out about Rs 64 per share, taking the price of acquisition of 1.5 crore (15 million) shares by all the employees to about Rs 96 crore (Rs 960 million) against the present market price of about Rs 200 a share.