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