The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Manmohan Singh, on Tuesday ratified the decision to divest 4.66 per cent equity stake in Bharat Heavy Electricals Limited (BHEL) through a block deal on stock exchanges, according to a news report by PTI, citing sources. This was also the last Cabinet meeting of Manmohan Singh who became the prime minister in 2004.
After surging 15.82 per cent to Rs 229.85 on Tuesday, its 52-week high in intra-day trading, shares of the power equipment maker closed the day at Rs 218.80, up 10.25 per cent on the Bombay Stock Exchange. Led by the gains, the company's market value surged Rs 4,981.49 crore to Rs 53,553.49 crore.
Media reports had said citing sources that the Cabinet may approve a proposal to further offload part of the government's equity stake in the company this week.
In March this year, the government had offloaded 5.94 per cent stake in BHEL to Life Insurance Corporation (LIC) for Rs 2,685 crore. LIC bought 145.4 million equity shares in BHEL at Rs 184 per share through a block deal on the BSE.
Following that deal, the government holding in the company reduced to 63.06 per cent, from 67.72 per cent previously.
In February, the Empowered Group of Ministers— headed by Finance Minister P Chidambaram— decided the timing and mode of disinvestment in BHEL. But the stake sale proposal was pending for CCEA’s approval.
Initially, the government had approved a proposal to divest 5 per cent stake in BHEL via a follow-on offer in August 2011. But the company had to withdraw the draft prospectus filed with the capital markets regulator SEBI due to the weak market condition.
BHEL is engaged in designing, engineering, manufacturing, constructing, testing, commissioning and servicing products and services for power transmission, renewable energy, oil & gas and defence sectors.
The cumulative overseas installed capacity of its manufactured power plants exceeds 9,000 megawatt across 21 countries, including Malaysia, Oman, Iraq, the UAE, Bhutan, Egypt and New Zealand.
(Edited by Joby Puthuparampil Johnson)