After Narendra Modi government clears BEML stake sale, stock surges 16%

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Mumbai | Published: January 10, 2017 6:19:11 AM

Stock prices of state-run Bharat Earth Movers (BEML) shot up by more than 16% and closed at Rs 1,157.75 on Monday after the government had approved 26% strategic sale in the company.

The equipment manufacturer for the defence forces, in a notification to the stock exchanges, said the Ministry of Defence has approved the strategic disinvestment. (PTI)The equipment manufacturer for the defence forces, in a notification to the stock exchanges, said the Ministry of Defence has approved the strategic disinvestment. (PTI)

Stock prices of state-run Bharat Earth Movers (BEML) shot up by more than 16% and closed at Rs 1,157.75 on Monday after the government had approved 26% strategic sale in the company.

The equipment manufacturer for the defence forces, in a notification to the stock exchanges, said the Ministry of Defence has approved the strategic disinvestment.

“The Government of India, Ministry of Defence, has communicated ‘in-principal’ approval of the Cabinet Committee on Economic Affairs (CCEA) of the Government of India, for strategic disinvestment of 26% equity shares in BEML,” the company said in the notification to the exchanges.

The price per share hit one-month high on Monday after it had fallen to as low as Rs 786.05 post demonetisation of November 8, 2016. The volume on Monday increased 15 times from last 20 days’ average of 4.4 lakh to 66.6 lakh.

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The government currently holds a 54.03% stake in the PSU. “The said shareholding would be sold to the strategic buyer/s to be identified by the Government of India by following due procedure,” the firm said in the notification. At the current market pricing of R1,157.75 a share, stake sake in BEML could fetch the exchequer more than Rs 1,200 crore.

In December, the government had approved the sale of excess land of four public sector pharmaceutical companies — Hindustan Antibiotics Limited, Indian Drugs & Pharmaceuticals Limited, Rajasthan Drugs & Pharmaceuticals Limited and Bengal Chemicals & Pharmaceuticals Limited — to meet their outstanding liabilities.

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