Govt Offers BHEL Shares at a Discount; Retail Investors Get Thursday Window
In a move that creates a rare buying opportunity for small investors, the Central Government has launched an Offer for Sale (OFS) for 5% of its stake in the state-owned engineering giant Bharat Heavy Electricals Limited (BHEL). The shares are priced at a discount, with retail investors allowed to place their bids on Thursday.
The BHEL OFS opened for non-retail investors, like institutional buyers, on Wednesday. The floor price has been fixed at ₹254 per share, which is roughly an 8% discount to Tuesday’s closing price of ₹276. On Wednesday, the stock adjusted to the news, trading around ₹260. The government plans to raise about ₹4,422 crore from the full 5% divestment.
Why This Matters Now
This disinvestment comes at a time when the government is actively mobilizing resources for infrastructure and development projects. For retail investors, it represents a chance to buy a solid PSU stock below its recent market price. The BHEL OFS also highlights the ongoing trend of the government reducing its stake in public sector enterprises while retaining management control.
Key Details for Retail Investors
Bidding Date: Thursday, February 12.
Time: 9:15 AM to 3:30 PM.
Floor Price: ₹254 per share.
Discount: Approximately 8% below Tuesday's market close.
Reserved Quota: 20% of the offer is reserved for retail investors, with a guaranteed allocation.
Even after selling this 5% stake, the Government of India will remain the majority promoter with over 60% ownership, ensuring continued control.
Strong Fundamentals Bolster Offer
The OFS coincides with positive momentum for the company. BHEL recently reported a staggering 206% year-on-year jump in net profit for the December quarter, reaching ₹382 crore. Revenue also grew a healthy 16% to ₹8,473 crore, driven by improved operational efficiency.
Adding to the positive sentiment, BHEL just secured a major ₹2,800 crore order for a Coal-to-Ammonium Nitrate plant in Odisha. This signals robust demand and a healthy order pipeline, making the discounted share offer more attractive for long-term investors.
Knowledge Box: Making Sense of the OFS
What is an OFS? An Offer for Sale is a quick way for promoters (here, the government) to sell shares directly on the stock exchange, usually at a discounted price to ensure full subscription.
What is a Green Shoe Option? This is an option to sell additional shares. The government is initially selling 3% but can sell an extra 2% if demand is high.
What is Floor Price? The minimum bid price. No investor can bid below ₹254 in this offer.
The Bottom Line
For retail investors, the BHEL OFS presents a short window to acquire shares of a profitable, large-cap PSU at a discounted price. While market fluctuations are inevitable, the company's strong quarterly performance and new order win provide a fundamental cushion. Investors should assess their portfolio and consider this as a potential opportunity, keeping in mind the inherent risks of equity investment.
Bidding can be done through the stock exchange segment via your regular trading account.
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