The government has decided to put its plan to divest its stake in power equipment maker Bharat Heavy Electricals (BHEL) on hold.
The company has withdrawn the draft red herring prospectus (DHRP) for a follow-on public offering (FPO) filed with the Securities and Exchange Board of India in September for the disinvestment of the government’s five per cent stake in the company.
At a press conference, chairman and managing director B P Rao said, “We received instructions from the department of disinvestment that the DRHP had to be withdrawn.”
In a filing to the Bombay Stock Exchange on Tuesday , the company said, “Consequent upon the receipt of ‘no-objection’ for withdrawal of the DRHP for the Bhel FPO from the department of heavy industries/department of disinvestment, BHEL’s board of directors, in its meeting on Tuesday , approved the withdrawal of the DRHP filed by BHEL with the Securities and Exchange Board of India.”
In July 2011, the government had appointed four merchant bankers — Morgan Stanley, DSP Merrill Lynch (Bank of America), ICICI Securities and Kotak Mahindra Capital — for Bhel’s FPO. On August 30, it had approved the disinvestment of five per cent of its shareholding in the company. The government holds 67.72 per cent stake in the equipment company.
In a separate development, BHEL on Tuesday announced a net profit of Rs 6,868 crore for the financial year ended March, a rise of 14 per cent compared with the net profit of Rs 6,011 crore in 2010-11. The company’s turnover increased 14 per cent to Rs 49,301 crore in 2011-12, compared with Rs 43,337 crore in 2010-11. However, the company’s order book fell to Rs 22,096 crore from Rs 60,000 crore in 2010-11, owing to sluggishness in the sector.
“We optimised our designs and improved our supply chain. There was better operational efficiency (in the last financial year). Also, sheer volumes (of equipment delivered) helped in recording a higher profit,” Rao said.
The power sector in India witnessed a sharp slowdown in 2011-12 due to various issues, including concern over coal allocation and environmental clearance. The number of power projects being finalised have also declined drastically.
“We expect to get 7,000 to 8,000-Mw equipment orders in the first quarter (of the current financial year),” Rao said. The company also expects an increase in its turnover to about Rs 50,000 crore this financial year. It plans to focus more on the oil & gas, transportation and defence sectors.
The company had cash reserves of Rs 6,800 crore at the end of March. The funds would be primarily for operational activities and capital investments. Rao said unforeseen turmoil in various parts of the globe had hit the company’s international business prospects. Bhel is present in many countries, with seven-eight per cent of the total revenue coming from exports.
The Gujarat government on Wednesday said that over 18 per cent of the projects, for which memorandums of understanding (MoUs) were signed during the ...
While some obsolete Acts pointed to by the panel were introduced in 1842, some came into being in 2013