BEML shares surge 10 per cent after govt’s divestment plan report

By: |
October 30, 2019 11:52 AM

Shares of BEML on Wednesday soared 10 per cent after a report that the Modi government is revisiting plans for strategic stake sale in the public sector undertaking and may soon issue an expression of interest (EoI).

In contrast, the picture was completely different in 2018 when the rupee depreciated by over 13% between January and October, with foreign investors dumping both equities and bonds.The government currently holds 54.03 per cent stake in the PSU. Notably, cabinet approval is not required for stake sale in BEML.

Shares of BEML on Wednesday soared 10 per cent after a report that the Modi government is revisiting plans for strategic stake sale in the public sector undertaking and may soon issue an expression of interest (EoI), CNBC-Awaaz reported citing unidentified sources. The shares surged to hit a fresh 52-week high of Rs 1,108.95 on NSE in the early trade today. The scrip was trading at Rs 1,077.90, up 69.10 points, or 6.85 per cent from the previous close at the time of reporting. The government may soon issue EoI for 26% stake sale with management control in the state-owned commercial vehicles’ company, the report also said.

Defence Ministry, DIPAM officials have met on BEML stake sale on the direction of the PMO, it added. The government currently holds 54.03 per cent stake in the PSU. Notably, cabinet approval is not required for stake sale in BEML. In the first quarter of FY20, BEML posted a narrowing of its consolidated profit to Rs 98.21 crore.  The PSU recorded a consolidated profit of Rs 162.56 crore in the year-ago period. Its consolidated income during June 2019 quarter increased to Rs 589.10 crore, compared with Rs 457.91 crore a year ago.

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The government has set a target of mobilising Rs 1.05 lakh crore from disinvestment proceeds and achieving this has become more critical after it doled out Rs 1.45 lakh crore stimulus by way of a cut in corporate tax. Meanwhile, the government is in the process to sell an entire 53.29 per cent stake in Bharat Petroleum Corp Ltd and its 63.75 per cent stake in Shipping Corporation of India (SCI), 30 per cent in Concor, 100 per cent NEEPCO and 75 per cent in THDC.

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