Government clears 5 per cent stake sale in BHEL
31 August 2011
The government on Tuesday cleared a proposal relating to the sale of five per cent of its stake in power equipment major Bharat Heavy Electricals Ltd (BHEL), which would help it raise more than Rs4,300 crore (about $940 million) at current prices.
The Cabinet Committee on Economic Affairs approved the proposal which would result in the government's stake coming down to 62.72 per cent in BHEL.
"This is in line with the government of India's policy of enhancing people's ownership in the CPSEs (central public sector enterprises) and enabling them to share the growth and prosperity of these enterprises," said an official statement.
Praful Patel, the minister for heavy industries and public enterprises, said that the disinvestment will depend on market conditions. "This (stake sale) is not a distress sale," he points out. "It must realise good value." If market conditions were not ripe, the department of disinvestment would be asked to defer the stake sale.
The government expects to raise about Rs.40,000 crore from disinvestment in the current fiscal.
According to S S Palanimanickam, the minister of state for finance, the government has already approved disinvestment in ONGC, Steel Authority of India Ltd, Hindustan Copper Ltd and National Building and Construction Corporation. The sale of 10 per cent stake in National Aluminium Company Ltd, is awaiting the government's approval.
In SAIL, the government has also approved the issue of five per cent of fresh equity, besides a sale of five per cent of its stake in the steel major.