BEML rallies 8% as govt invites initial bids for strategic divestment

Shares of BEML Limited rallied 8 per cent to Rs 1,050 on the BSE on Monday after the government invited bids for strategic divestment in in the defence and engineering company. The stock was trading close to at its 52-week high level of Rs 1,080 on January 16, 2020.

The government will sell 26 per cent out of the total 54.03 per cent stake it holds in the company along with transfer of management control, according to the preliminary information memorandum released by the Centre.

“The Government of India (GoI) currently holds 54.03 per cent of the total equity share capital of the Company. Gol has decided to disinvest 26 per cent of the total equity share capital of the Company through strategic disinvestment with transfer of management control,” BEML said in exchange filing.

Gol has appointed SBI Capital Markets Limited (SBICAP) as its transaction advisor to advise and manage the strategic disinvestment process. The aforesaid disinvestment process is to be implemented through open competitive bidding route, it said.

The sale could fetch the government Rs 1,055 crore, according to the company's share closing price on Friday. The government, in December 2016, had approved a plan to divest 26 per cent stake in the state-owned entity.

Expressions of interest (EoIs), that will have to be submitted by March 1, 2021, would be vetted based on the eligibility criteria specified in the first stage. Interested parties will be allowed to send their queries from Monday, and will have to submit their EoIs by March 1 electronically, and a physical copy by March 16.

The stock of BEML has witnessed strong run-up in the past one month, rallying 40 per cent, as compared to 7 per cent rise in the S&P BSE Sensex. At 10:00 am, it was trading 4.5 per cent higher at Rs 1,018 on the BSE, against 0.54 per cent gain in the benchmark index. A combined 1.6 million equity shares have changed hands on the counter on the NSE and BSE.