Bharat Electronics' Rs 2,171 crore buyback offer to open on October 6

Shares of the PSU were trading at Rs 1,275, up 0.13 per cent, on the BSE

Defence PSU Bharat Electronics (BEL) on Tuesday said its Rs 2,171 crore equity shares buyback offer will open on October 6.

In a letter of offer for buyback, Bharat Electronics' manager to the buyback offer, IDBI Capital Markets & Securities Ltd said: "This buyback offer will open on Thursday, October 6, 2016 and close on Friday, October 21, 2016."

The record date for determining the buyback entitlement and names of eligible shareholders is September 27. The comapny's board has approved a proposal to buy back 1.66 crore shares at a price of Rs 1,305 apiece, for over Rs 2,171.15 crore, which is not exceeding 25 per cent of the aggregate of the fully paid-up share capital and free reserves, BEL said in a filing to the BSE.

A part of the buyback will accrue to the government.

The Government holds 75.02 per cent stake in BEL. The buy back will happen on a proportionate basis through a tender offer, in accordance with the Companies Act, 2013, it added.

The department of Investment and Public Asset Management (DIPAM), previously known as Department of Disinvestment, has been asking cash rich PSUs to utilise surplus cash in either capex or buy back. Last month, the board of Maharatna PSU, Coal India had approved a buy back of 25 per cent of its paid up share capital and free reserves aggregating to Rs 3,650 crore.

In June, NMDC and MOIL board had approved buy back of Rs 7,528 crore and Rs 863 crore respectively, while Nalco had said in May that it would buy back 25 per cent equity for over Rs 2,835 crore.

The government aims to raise Rs 56,500 crore by selling stakes in state-owned enterprises in 2016-17, out of which Rs 36,000 is to come from minority stake sale in PSUs and rest through strategic sale.

Shares of BEL were trading at Rs 1,275, up 0.13 per cent, on the BSE.