After REC, PFC, It's BHEL's Turn for Divestment: Sources

After REC, PFC, It's BHEL's Turn for Divestment: Sources

In what can be seen as a major reform signal from the government and an attempt to generate more funds for infrastructure development and social sector schemes, a stake sale in Bharat Heavy Electricals Limited (BHEL) is on the anvil. Sources in finance ministry have told NDTV that a 5 per cent stake sale in BHEL is likely to be the next offer for sale (OFS) from the divestment department.

At the current market price, the government is likely to rake in Rs 3,540 crore from the BHEL stake sale. The measure will add to Rs 3,210 crore, which the government has already raked in from the 5 per cent stake sale in Rural Electrification Corporation (REC) & Power Finance Corporation (PFC) each.

The stock of BHEL has gained around 20 per cent in the last three months and sources said the divestment department is waiting for the right window of opportunity to come out with this issue.

This year, the government has planned to start early with its divestment process to meet the very ambitious target of Rs 69,500 crore for FY16. At the beginning of the year the government was quite confident to meet this year's divestment target but now it is looking to get more realistic and expects to at least get highest-ever divestment proceeds this year, which still means more than Rs 25,000 crore.

Extreme volatility in the equity markets in the last two months has adversely impacted government's grand divestment plans and till now the department has successfully managed to complete the divestment in REC and PFC. Even for these small issues the government had to take a lot of precaution to avoid the fall in the stock prices.

Shares of BHEL were trading flat at Rs 286.40 in noon trade on Friday.