Government's Offer for Sale in BHEL Oversubscribed, Raises Over ₹2,400 Crore
The Indian government has successfully concluded its offer for sale (OFS) of a 5% stake in Bharat Heavy Electricals Limited (BHEL), a leading public sector engineering and manufacturing enterprise. The sale was oversubscribed, indicating robust investor interest, and has raised over ₹2,400 crore for the exchequer. This move is part of the government's ongoing disinvestment strategy aimed at raising funds and enhancing market participation in state-owned companies.
Strong Demand from Institutional Investors
The OFS, which opened for subscription, witnessed significant demand, particularly from institutional investors. The non-retail portion of the sale was oversubscribed by more than 2.5 times, reflecting confidence in BHEL's prospects and the government's reform initiatives. Retail investors also participated, with their quota being fully subscribed, ensuring broad-based ownership.
The floor price for the sale was set at ₹215 per share, and the transaction was executed through the stock exchanges, adhering to market norms. Post-sale, the government's stake in BHEL will reduce, though it will retain majority control, aligning with efforts to improve corporate governance and operational efficiency in public sector undertakings.
Impact on Disinvestment Targets and Market Sentiment
This successful stake sale contributes to the government's disinvestment targets for the fiscal year, providing a boost to its revenue generation plans. The oversubscription underscores positive market sentiment towards public sector enterprises undergoing restructuring, and it may pave the way for similar divestments in other state-owned companies.
BHEL, known for its role in power generation and infrastructure projects, has been focusing on diversification and technological upgrades. The fresh capital infusion from this sale could support its growth initiatives, including expansion into renewable energy and defense sectors.
Analysts view this development as a positive step towards reducing the fiscal deficit and promoting equity market liquidity. However, they caution that sustained performance and reforms in BHEL will be crucial for long-term investor returns.
