Govt To Dilute 5% Stake In BHEL; Files Documents For FPO (10-Oct-2011)
Bharat Heavy Electricals (BHEL) filed initial papers with market regulator the Securities and Exchange Board of India (SEBI) for the follow-on public offer (FPO). With this FPO government will dilute its 5% stake in the power equipment maker.
The said FPO is expected to fetch over Rs 4,000 crore, however, the volatile market conditions have made it dubious. BHEL, on August 30, had received government's nod to divest 5% of its shareholding. The government holds 67.72% stake in the entity.
Morgan Stanley, DSP Merrill Lynch (Bank of America), ICICI Securities and Kotak Mahindra Capital were appointed as bankers for BHEL's FPO. Also, to encourage public ownership in Central Public Sector Enterprises a price discount of 5% would be offered to retail investors.
BHEL's FPO is a part of government's ambitious Rs 40,000 crore disinvestment target for 2011-12. However, due to volatile market conditions, it has been able to mop up only Rs 1,162 crore through sale of shares in Power Finance Corporation.
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