BEML to raise Rs 500 cr via public issue for capex plans

Bharat Earth Movers Limited (BEML), the leading public sector firm manufacturing construction and mining equipment and transport vehicles for the defence sector, plans to raise Rs 450-500 crore through a public issue during the second quarter of this financial year.

The company has sent its proposal to the government and it is currently being examined by the ministries of defence and finance, said V R S Natarajan, chairman and managing director.

He said the company would offer 50 lakh shares to the public and the issue price would be determined through the book building process. The money raised would be used to fund BEML's expansion and diversification plans, he added.

Currently, the government holds 61 per cent of the equity in BEML, while the rest is held by the public, employees, banks and financial institutions.The government holding would reduce to 54-55 per cent post-issue. The company had made its initial public offer a decade ago.

Natarajan said the board of directors has approved a capital expenditure of Rs 160 crore during 2006-07.

The company has sought Rs 125 crore from the central government for setting up a research and development unit in Bangalore for indigenous manufacturing of metro coaches.

BEML expects to get an order for supply of 130 coaches from Bangalore Metro Rail Corporation as and when the project materialises.

The company expects to get 30 per cent of its business from defence ministry this financial year. It has bagged an order from the defence ministry to supply 11 vehicles of 12x12 axle for carrying Brahmos missile, he added.

It has also bagged an order from the defence services to supply around 1,000 Tatra trucks, trailers and recovery vehicles of different tonnages. BEML has three manufacturing facilities at Bangalore, Kolar Gold Fields and Mysore.