LIC buys 4.6% stake in BHEL

The insurance firm purchased 11.41 crore shares worth Rs 1,889 crore

Life Insurance Corporation has bought shares worth Rs 1,889 crore, about 4.66% stake, in state-owned power equipment maker BHEL through an open market transaction.

LIC has purchased 11.41 crore shares in BHEL at a price of Rs 165.55 apiece through a block deal on the BSE.

The Empowered Group of Ministers, headed by Finance Minister P Chidambaram, last week decided the timing and mode of disinvestment in BHEL.

Ministry of Heavy Industry and Public Enterprises, the parent ministry of BHEL, has for long opposed the proposed disinvestment in the company citing choppy market conditions.

In August 2011, the Cabinet had cleared the sale of 5% stake in BHEL through a follow-on public offer (FPO). The government holds a 67.72% stake in the Navratna firm.

However, market conditions led to a delay in the issue and the company in April 2012 withdrew the draft prospectus filed with market regulator SEBI.

The government has so far raised about Rs 5,093.87 crore through stake sales in PSUs. As per the revised estimates in the Interim Budget, the disinvestment target was lowered to Rs 16,027 crore in this financial year from Rs 40,000 crore.

The EGoM has also cleared 10% stake sale in Indian Oil Corporation to ONGC and Oil India, which is likely to fetch the exchequer about Rs 5,300 crore.

BHEL scrip was trading at Rs 165, up 1.54%, on the BSE.