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Government Looking To Divest 10% Stake in BHEL

By TEAM VCC

  • 19 Jun 2009

The central government has said that it's looking to divest upto a 10% of its stake in power equipment major Bharat Heavy Electricals (BHEL). "The point of disinvestment (in BHEL) is still under consideration... the government has definitely a positive thinking on that line," Minister of Heavy Industries and Public Enterprises Vilasrao Deshmukh has been quoted as saying in a PTI report. At today's closing price of Rs 2,090.5 per share, BHEL had a market capitalisation of Rs 102,329 crore. This marketcap values a 10% stake in the navratna at more than Rs 10,000 crore.

The government currently holds a  67.72% stake in BHEL, which would come down to 57.72% post stake sale. If the government plans to go ahead with a  disinvestment, it will have to file for a follow-on public offer. The intention to disinvest in BHEL follows government plans for a public issues of state-owned Oil India Ltd and power generator NHPC Ltd.

The government also said that BHEL will enter into an agreement with Indian Railways for supply of stainless steel EMU coaches on a long term basis. It will also sign joint ventures with Madhya Pradesh Power Generation Company and Gujarat State Electricity Generation Co to set

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up power plants.

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