As part of the government’s plan to raise Rs 40,000 crore from disinvestment in the current financial year, the Cabinet Committee on Economic Affairs on Tuesday approved offloading 5 per cent paid-up equity of Bharat Heavy Electricals Ltd (BHEL) through book-building process in the domestic market.
The government stake in the 1953-founded company will come down to 62.72 per cent after the disinvestment.
“The government,” a release said on Tuesday, “has decided to allow five per cent price discount to the retail investors as well to encourage greater public ownership of the public sector companies. Ten per cent of the shares to be offered for sale through further public offer shall be reserved for the employees of the company. The government has also decided to allow five per cent price discount to the employees of the company.”
The capital-headquartered BHEL is a listed CPSE engaged in execution of heavy engineering/electrical equipment manufacturing projects. One of the country’s largest and oldest state-owned engineering enterprise, it has a paid-up equity capital of Rs 489.52 crore.
BHEL stocks on Tuesday went down by .01 per cent at Rs 1,767 at the Bombay Stock Exchange, but rose by 260 points to close at 16,676. For the year ended March 31, 2011, the company had recorded an increase of about 40 per cent in consolidated net profit, at Rs 6,053 crore.
The consolidated income grew 26 per cent to Rs 43,679 crore in 2010-11. It ended the first quarter of this fiscal with a profit of Rs 815.51 crore.
The government has, in the current financial year, raised Rs 1,162 crore through divestment, of a five per cent stake in Power Finance Corporation in May. Initially this year, BHEL was not part of the government’s list for disinvestment.
Also to see divestment in 2011-12are Oil and Natural Gas Corporation, Steel Authority of India Ltd, Hindustan Copper, Rashtriya Ispat Nigam Ltd and National Buildings Construction Corp. Last financial year, the government had raised Rs 22,400 crore through divestment — in Coal India, SJVNL, Power Grid, Engineers India, MOIL and Shipping Corporation of India.
