Shares of Castrol India surge 9% after BP agrees to sell 65% stake to Stonepeak

Shares of Castrol India rose as much as 8.85% to hit an intraday high of ₹202.40, after BP announced that it has reached an agreement to sell a 65% shareholding in Castrol to Stonepeak, at an enterprise value of $10.1 billion. 

The transaction is expected to result in total net proceeds to BP of approximately $6.0 billion, which includes around $0.8 billion for the pre-payment of future dividend income over the short to medium term on BP’s retained 35% stake and other adjustments. 

The transaction includes minority interests in Castrol, principally in India (49% interest), Vietnam (35%), Saudi Arabia (50%), Thailand (40%) and other jurisdictions.

The implied total equity value of Castrol is $8.0 billion after deducting JV minority interests totalling $1.8 billion, and other debt-like obligations of around $0.3 billion, and subject to customary adjustments. A significant proportion of Castrol JV minority interests relates to the shareholding in the publicly listed Castrol India Limited.

“This represents an implied EV / LTM EBITDA of around 8.6,x reflecting the strength of the business and future growth potential. The transaction represents a significant milestone in BP’s commitment to accelerate its strategy, including simplifying the portfolio, strengthening the balance sheet, and focusing the downstream on its leading integrated businesses,” the statement read.

The new joint venture will be incorporated, comprising 65% Stonepeak and 35% bp ownership after the completion of the transaction. Following a two-year lock-up period, BP has the option to sell its 35% stake in Castrol. The transaction is expected to be completed by the end of 2026, subject to regulatory approvals.

The sale is part of BP’s previously announced $20 billion divestment programme and brings completed and announced divestment proceeds to date to around $11.0 billion. All proceeds from this transaction will be allocated to reducing net debt towards BP’s target of $14-18 billion by the end of 2027. As of the end of 3Q 2025, BP’s net debt was $26.1 billion. Divestment proceeds guidance for 2025 is over $4 billion, of which $1.7 billion has been received as of 3Q25 results, with the remainder expected to be received by year-end 2025.

Carol Howle, interim CEO at BP, said, “Today’s announcement is a very good outcome for all stakeholders. We concluded a thorough strategic review of Castrol, which generated extensive interest and resulted in the sale of a majority interest to Stonepeak. The transaction allows us to realise value for our shareholders, generating significant proceeds while continuing to benefit from Castrol’s strong growth momentum. And with this, we have now completed or announced over half of our targeted $20 billion divestment programme, with proceeds to significantly strengthen BP’s balance sheet. 

The sale marks an important milestone in the ongoing delivery of our reset strategy. We are reducing complexity, focusing the downstream on our leading integrated businesses, and accelerating delivery of our plan. And we are doing so with increasing intensity – with a continued focus on growing cash flow and returns, and delivering value for our shareholders.”

Anthony Borreca, Senior Managing Director and Co-Head of Energy at Stonepeak, said, “Lubricants are a mission-critical product, which are essential to the safe and efficient functioning of virtually every vehicle, machine, and industrial process in the world. Castrol’s 126-year heritage has created a leading market position, an iconic brand, and a portfolio of differentiated products that deliver meaningful value to its customers. We are excited to work alongside Castrol’s talented employees, coupled with BP’s continued guidance as a minority interest holder, as we support the business’s continued growth.”