Cabinet approves sale of 4.66% stake in BHEL

The cabinet committee on economic affairs (CCEA) headed by prime minister Manmohan Singh on Tuesday approved the proposal to sell 4.66 per cent stake in Bharat Heavy Electricals Ltd (BHEL) through a block deal on the stock exchange.

An empowered group of ministers headed by finance minister P Chidambaram had, in February, recommended the time and mode of disinvestment in the state-run power equipment maker, pending approval by the CCEA.

The finance ministry had, in March, sold 114.1 million shares or 4.66 per cent stake in the state-owned company to Life Insurance Corporation (LIC) at Rs165.55 per share, to raise about Rs1,889 crore (See: Govt to sell 5% stake in BHEL to LIC via block deal).

With that the government's stake in BHEL had come down from 67.72 per cent to 63.06 per cent and the latest share sale would bring it to 58.40 per cent.

Earlier, in August 2011, the cabinet had cleared the sale of 5 per cent stake in BHEL through a follow-on public offer (FPO). However, in April 2012, the company withdrew the draft prospectus filed with market regulator SEBI as tight market conditions led to a delay in the issue.