The finance ministry has added Bhel in its disinvestment list to raise R40,000 core for the current fiscal. The public offer of the engineering firm may hit the market in the second quarter of FY12 along with steel major SAIL?s follow-on issue which got delayed over volatile market conditions and disagreements over pricing.
Bhel?s FPO will involve government divesting 5% government equity in the company to raise about R4,500 crore. The company was not in the list of entities under the disinvestment programme for the current fiscal. It got included in the list after the company?s board approved the equity sale at its meeting on Monday.
In case of SAIL, the government earlier proposed to bring the offer in the first half of June. However, FPO of SAIL has been delayed to next quarter to get more clarity over the timing of the issue in choppy market conditions, an official in the finance ministry said. Another government source said that differences have also cropped over the pricing of the issue with merchant bankers favouring a lower price band. ?The SAIL board met on Monday to finalise RHP, which has been approved. The timing of the issue will be finalised after assessment of the market conditions.? SAIL chairman CS Verma told FE.
The government presently holds 85.8% stake in SAIL, and it plans to divest 5% of its stake through this FPO, another five per cent would be fresh equity sale. The government proposes to raise around R4,000 crore by diluting its stake in the steel giant.
The government currently holds 67.72% in Bhel, which will come down to 62.72% following the disinvestment. ?The board of directors of the company has recommended the disinvestment of 5% of the paid-up equity of Bhel out of the government of India?s shareholding,? Bhel said in a filing to the BSE.
The company further said that 10 % of the equity to be offloaded under the disinvestment programme would be reserved for employees. According to finance ministry sources, the FPO of oil major ONGC is likely to hit the market in first half of July.