BHEL Shares Tumble Nearly 6% after Govt Plans to Sell Minor Stake for ₹4,500 Cr

Shares of Bharat Heavy Electricals Limited (BHEL) fell sharply by nearly 6% in early trading on Wednesday, a day after the government announced it would sell up to 5% stake in the company through an Offer for Sale (OFS).

On the BSE, the stock dropped 5.63% to ₹260.50 today. On the NSE, it was trading at ₹260.60 around 10:37 am, down 5.61% compared to its previous close of ₹276.10.

The government's stake sale will open for non-retail investors on February 11, while retail investors can bid on February 12.

The announcement was made by the Department of Investment and Public Asset Management (DIPAM). Its Secretary, Arunish Chawla, said the government plans to sell 3% equity in BHEL, with an additional 2% available under a greenshoe option (meaning more shares can be sold if there is strong demand).

The floor price for the sale has been fixed at ₹254 per share, which is lower than the current market price. If the entire 5% stake, about 17.41 crore shares, is sold at this price, the government could raise around ₹4,422 crore.

The base offer includes 3% stake (around 10.44 crore shares), with the option to sell another 2% (about 6.96 crore shares). After the sale, the government will still hold a majority stake, as it currently owns 63.17% in BHEL.

This move comes shortly after the Economic Survey suggested that the government may consider reducing its minimum holding in public sector companies. It proposed changing the definition of a "government company" to allow the Centre to lower its stake to 26% in listed state-run firms.

The idea aims to raise more funds, improve efficiency, and speed up privatisation. The proposal also aligns with the government's disinvestment target of ₹80,000 crore for FY27.

The Survey also mentioned that even without changing the legal definition, the government could gradually reduce its stake below 51% through phased share sales, and possibly even exit completely in some cases. This, it said, would help public sector companies operate more professionally, with better governance and wider ownership.