Govt to Sell 5% Stake in BEL To­day, Aims to Raise ₹ 1,600 cr

The Economic Times - - Economy: Macro, Micro & More - Our Bureau

New Delhi: The gov­ern­ment will sell 5% of its stake in state-run de­fence ma­jor Bharat Elec­tron­ics Ltd on Wed­nes­day, of­fi­cials said.

The floor price has been fixed at .₹ 1,498 per share, a dis­count of about 4% to BEL’s clos­ing price on Fe­bru­ary 20, which was .₹ 1,559.95.

The sale is ex­pected to fetch the gov­ern­ment .₹ 1,600 crore. It will be through an of­fer for sale (OFS), which will be spread over two days—Wed­nes­day will be re­served for in­sti­tu­tional in­vestors and Thurs­day for re­tail in­vestors. The gov­ern­ment holds 74.41% stake in BEL, which has a mar­ket cap of nearly .₹ 35,000 crore.

This will be the fifth OFS is­sue of a state-run firm in this fis­cal, the last be­ing that of MOIL Ltd, where the gov­ern­ment sold 10% stake to raise around .₹ 485 crore. Other state-run firms where the gov­ern­ment has di­vested its stake through the OFS route in 2016-17 in­clude NHPC, HCL Ltd and NBCC.

The gov­ern­ment has raised around .₹ 37,966 crore through dis­in­vest­ment so far in 2016-17. It has re­vised its dis­in­vest­ment tar­get for the year to .₹ 45,500 crore.

“As the eq­uity mar­ket gets stronger, we hope to over­shoot the dis­in­vest­ment tar­get,” a fi­nance min­istry of­fi­cial said.

Last week, the depart­ment of in­vest­ment and pub­lic as­set man­age­ment (DIPAM) is­sued the mech­a­nism for list­ing of state-run firms as the gov­ern­ment plans to list all its com­pa­nies that have a pos­i­tive net worth, no ac­cu­mu­lated losses and have posted net pro- fit in three pre­ced­ing years.

Ac­cord­ing to the Pub­lic En­ter­prise Sur­vey of 2014-15, there are 157 profit-mak­ing state-run firms, of which 45 are listed.

The gov­ern­ment has set a dis­in­vest­ment tar­get of .₹ 72,500 crore for the next fis­cal year. Of this, it ex­pects .₹ 46,500 crore to come from reg­u­lar stake sales, in­clud­ing ex­change traded funds (ETFs), and .₹ 11,000 crore from the list­ing of gen­eral in­sur­ers. The gov­ern­ment has in­vited ap­pli­ca­tions for en­gage­ment of ad­vi­sors for seven firms, in­clud­ing Bharat Pumps & Com­pres­sors Ltd, Bridge & Roof Co and Hin­dus­tan Flu­o­ro­car­bons, as it seeks to pur­sue its strate­gic sales pro­gramme and bring con­sol­i­da­tion among pub­lic sec­tor en­ter­prises. Ear­lier, a panel con­sti­tuted by the NITI Aayog had rec­om­mended clo­sure or wind­ing up of 26 loss-mak­ing cen­tral pub­lic sec­tor en­terp­trises.

In his 2017-18 bud­get speech, fi­nance min­is­ter Arun Jait­ley had also said that the gov­ern­ment plans to list shares of rail­ways pub­lic sec­tor en­ter­prises such as IRCTC, IRFC and IRCON.


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