The government will sell a 5% stake in state-run aerospace and defence company Bharat Electronics Ltd to raise about Rs 1,650 crore ($246 million) as part of the disinvestment plan for the current financial year.
The two-day offer for sale is for about 11.16 million shares, Bharat Electronics said in a stock-exchange filing on Tuesday. The shares will be sold at a floor price of Rs 1,498 apiece. This is a 4.13% discount to Tuesday’s close price of Rs 1,559.95.
A fifth of the total shares have been reserved for retail investors, who will be eligible for a 5% discount on their bids, subject to the cut-off price.
The offer will take place through a separate window on stock exchanges. Only non-retail investors will be allowed to place bids on Wednesday. Retail investors will be allowed to bid on Thursday.
SBI Cap Securities Ltd, ICICI Securities Ltd, Edelweiss Securities Ltd and Deutsche Equities India Pvt. Ltd are managing the stake sale.
After the sale, the government’s stake in Bharat Electronics will decline to 69.41% from 74.41% held at the end of December 2016.
The planned stake sale in Bharat Electronics comes after the government last month sold a 10% holding in state-run manganese ore mining company MOIL Ltd to raise Rs 475 crore. The offering reduced the government’s stake in MOIL to 65.58%.
Disinvestment target
The government has raised Rs 37,696 crore in 2016-17 via disinvestment and allied instruments such as buybacks. It had budgeted Rs 56,500 crore for this fiscal year through disinvestment but revised the target to Rs 45,500 crore.
Of the total, the government raised Rs 6,000 crore through the second tranche of the Central Public Sector Enterprise exchange-traded fund that comprised the scrips of 10 state-run companies.
Separately, the government sold a stake in NHPC Ltd, NBCC Ltd and Hindustan Copper Ltd during the year. It also raised money through share buybacks in NMDC Ltd, National Aluminium Co Ltd and Coal India Ltd. The government is also aiming to launch HUDCO Ltd’s initial public offering by diluting a 10% stake. HUDCO would be the first state-run company to go public in nearly five years.
The government has set a target of raising Rs 72,500 crore via disinvestment during the next financial year, which begins in April.
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