The state-owned firm's stock surged 16.94 per cent to settle at Rs 268.25 on the BSE after climbing as much as 18.98 per cent to Rs 272.95, a 52-week high.
On the National Stock Exchange, the shares advanced 14.42 per cent to close at Rs 265.
The stock was the top gainer on both the Sensex and Nifty indices.
The company signed an MoU with PT Star Vyobros for setting up a 200 MW coal-fired power plant in the Sulawesi region of Indonesia, Bhel said in a statement. Financial details were not divulged by the company.
Shares of other power sector companies gained amid continued optimism over the incoming Narendra Modi-led government.
Coal India climbed 12.73 per cent, NTPC surged 10.35 per cent, Tata Power Co (7.95 per cent) and Adani Power (7.64 per cent). The BSE power index rose 10.15 per cent to 2,148.24.
The benchmark Sensex gained 241.31 points to 24,363.05, a record close.