Govt to Sell 3% Stake in BHEL via OFS, Sets Floor Price at Rs 254 per Share
The government is set to divest a 3% stake in Bharat Heavy Electricals Limited (BHEL), totaling over 10.44 crore shares, through an Offer for Sale (OFS). The floor price for this transaction has been established at Rs 254 per share.
Key Details of the BHEL Stake Sale
– OFS Structure: The government has secured an oversubscription option, allowing for the sale of an additional 6.96 crore shares, equivalent to 2% equity. If this option is fully utilized, the total divestment could reach 17.41 crore shares, representing 5% of BHEL’s equity capital.
– Trading Platform: The shares will be available through a designated OFS window on both BSE and NSE.
– Timing: The OFS will occur during trading hours on Wednesday, starting at 9:15 AM and concluding at 3:30 PM.
– Financial Implications: Should the government successfully divest the initial 3% equity at the specified floor price, it will generate Rs 2,653 crore. This figure could rise to Rs 4,422 crore if the oversubscription option is fully exercised.
Recent Performance of BHEL
BHEL’s shares recently closed at Rs 275.90, marking a gain of Rs 1.25 or 0.46% from the previous closing price. The company has reported a remarkable recovery in its December quarter, with net profit more than tripling due to enhanced execution capabilities and operational efficiencies.
– Earnings Report Highlights:
– Net Profit: Rs 382 crore for Q3, up from Rs 125 crore in the same quarter last year (a 206% increase year-on-year).
– Revenue: Increased by 16% YoY to Rs 8,473 crore, buoyed by improved project execution and a stronger order pipeline.
– Total Income: Rose to Rs 8,700 crore, up from Rs 7,393 crore in the previous year.
– Cost Dynamics: Total expenses climbed to Rs 8,188 crore from Rs 7,224 crore in the corresponding quarter last year. Notably, the cost of materials and services reached Rs 6,059 crore, while employee benefits saw a slight increase to Rs 1,531 crore.
– Finance Costs: These declined to Rs 182 crore from Rs 195 crore in the prior quarter, adding to profit margins.
Conclusion
The upcoming BHEL stake sale marks a significant financial maneuver by the government, potentially raising substantial funds and reflecting confidence in the company’s turnaround. Investors interested in participating should be aware of the OFS details, as this could present an appealing investment opportunity in a recovering PSU.