US slaps Imran Khan on wrist

US slaps Imran Khan on wrist

US hints Imran Khan is doing the wrong thing in trying to bring down Nawaz Sharif govt...
No table for three

No table for three

Narendra Modiís gamble wonít work unless Delhi gets act together on J&K, border management...

Govt to sell 5 pct stake in Bhel to LIC; may get Rs 2,046 crore

Feb 28 2014, 21:12 IST
Comments 0
Bhel disinvestment will happen this fiscal through a block deal to LIC. Reuters Bhel disinvestment will happen this fiscal through a block deal to LIC. Reuters
SummaryBhel disinvestment will happen this fiscal through a block deal to LIC.

The government will sell a 5 per cent stake in power equipment manufacturer Bhel to state-owned Life Insurance Corporation of India, fetching the exchequer about Rs 2,046 crore.

"Bhel disinvestment will happen this fiscal through a block deal to LIC," Disinvestment Secretary Ravi Mathur told reporters here.

The Empowered Group of Ministers headed by Finance Minister P. Chidambaram met today to decide on the timing and mode of disinvestment in Bharat Heavy Electricals Ltd (Bhel).

Bhel shares gained 3.18 per cent to Rs 167.20 apiece at the close on the BSE today, valuing the company at Rs 40,923 crore. A 5 per cent stake would be worth about Rs 2,046 crore.

The Department of Heavy Industries, which is the administrative ministry of the company, has for long opposed the proposed disinvestment in state-run Bhel, citing unfavourable market conditions.

It wanted the issue not to look like a "distress sale" but rather one that would reap "good value."

"As far as the Bhel stake sale is concerned, we have ruled out going to the market for 5 per cent divestment because we feel that market conditions are not suitable for the moment for such a valuable company to be sold in the open market," Heavy Industries Minister Praful Patel had said.

In August 2011, the Cabinet had cleared the sale of a 5 per cent stake in Bhel through a follow-on public offer (FPO). The government holds a 67.72 per cent stake in the Navratna company.

However, market conditions led to a delay in the issue and the company in April 2012 withdrew the draft prospectus filed with market regulator Sebi.

Bhel reported a net profit of Rs 694.81 crore in the October-December quarter, down from Rs 1,181.85 crore in the corresponding period a year earlier. It was the sixth straight quarterly drop in profit for the PSU, mainly due to a slowdown in sales.

The company's order book stood at about Rs 1,00,600 crore at the end of December 2013.

The government in July 2011 had appointed Morgan Stanley, DSP Merrill Lynch (Bank of America), ICICI Securities and Kotak Mahindra Capital to manage Bhel's follow-on offer.

The government has so far raised about Rs 5,093.87 crore through stake sales in PSUs. As per the revised estimates in the Interim Budget, the disinvestment target was lowered to Rs 16,027 crore in this financial year from Rs 40,000 crore.

Earlier today, the EGoM had cleared a 10 per cent stake sale in Indian Oil Corporation to ONGC and Oil India, which would fetch the exchequer about Rs 5,300 crore.

Also Check:

Live: BSE Sensex

Check prices: All Models

Buying used Car?

Ads by Google

More from Companies

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...