BEML plans Rs 400 cr public float

Bharat Earth Movers Ltd (BEML) plans to raise about Rs 400 crore through a public issue next month. Announcing the public issue today at a press conference here, V R S Natarajan, chairman and managing director, BEML, said the government would offload a 7 per cent stake through the issue.

Post the issue, the government's holding in the company would come down to 54 per cent from the current 61 per cent. ICICI Securities has been appointed as book-running lead manager for the fully book-built issue. Roadshows are being planned in places such as Hong Kong, Singapore and London for issue, said a senior I Sec official.

The company will reserve 10 per cent each of the issue for BEML shareholders and employees. Out of the Rs 400 crore raised in the IPO, Rs 125 crore will be used for replacing old machinery in the company's factories located in Bangalore, Mysore and Kolaroold in Karnataka.

Nearly Rs 100 crore will be invested on setting up Mumbai Metro Consortium, a consortium planned to develop metro rail infrastructure in the country.

Nearly Rs 84 crore will be utilised for upgrading the company's in-house metro rail infrastructure. BEML will also utilise Rs 90 crore as voluntary retirement scheme (VRS) expenses for 2,000 of its 12,000 employees.

BEML also has plans to enter the contract mining segment and is expected to invest Rs 50 crore for setting up a joint venture in the segment.

Earlier in July, the company board had approved an increase in the authorised share capital of the company from Rs 60 crore to Rs 100 crore by creation of 4 crore equity shares and consequential amendments in the memorandum and article in the article of association of the company.