Notwithstanding volatile market conditions, Bharat Heavy Electricals (BHEL) today filed initial papers with market regulator the Securities and Exchange Board of India (Sebi) for the follow-on public offer (FPO) that will see the government offloading its 5% stake in the company
The sale of government's 5% stake in the power equipment maker is expected to fetch over Rs 4,000 crore.
BHEL filed papers for the FPO with Sebi today, sources said.
The government in July had appointed four merchant bankers -- Morgan Stanley, DSP Merrill Lynch (Bank of America), ICICI Securities and Kotak Mahindra Capital -- for BHEL's FPO.
Based on today's market value of Rs 80,141.77 crore, the sale of 5% stake would be worth over Rs 4,000 crore.
The proposed share sale is a part of the government's ambitious Rs 40,000 crore disinvestment target for 2011-12.
More From This Section
With high volatility in the stock markets, there are doubts whether the target would be met. So far this fiscal, the government has been able to mop up only Rs 1,162 crore through sale of shares in Power Finance Corp.
The government on August 30 approved the disinvestment of 5% of its shareholding in BHEL. The government holds 67.72% stake in the entity.
A price discount of 5% would be given for retail investors, as part of efforts to encourage greater public ownership in Central Public Sector Enterprises, the statement said.
Ten per cent of the shares to be offered for sale through further public offer shall be reserved for the employees, who would also given a price discount of 5%.
The government has already approved disinvestment in ONGC, SAIL, HCL and NBCC.
Last fiscal, the government raised Rs 22,763 crore through sale of equity in public sector enterprises.