BHEL Offer for Sale Oversubscribed Two Times on Opening Day
The government's strategic disinvestment initiative in Bharat Heavy Electricals Ltd (BHEL) witnessed robust investor appetite on the first day of its Offer for Sale (OFS). Institutional investors demonstrated strong confidence, placing bids worth over Rs 5,650 crore on Wednesday, leading to the base issue size being oversubscribed by two times.
Strong Institutional Demand for BHEL Shares
According to data from the bidding process, institutional investors submitted bids for more than 22.07 crore shares at an indicative price of Rs 256.07 per share. This substantial demand came against an initial offer of approximately 9.40 crore shares under the base issue size, highlighting the significant oversubscription.
The government is divesting a 3 per cent equity stake in the public sector undertaking, with an additional 2 per cent offered under a greenshoe option. The floor price for the two-day OFS has been set at Rs 254 per share. Retail investors will have their opportunity to participate by placing price bids on Thursday.
Details of the Offer for Sale Structure
The base issue size comprises more than 10.44 crore shares, representing the initial 3 per cent stake being divested. Additionally, the government has included a greenshoe option to sell over 6.96 crore shares, equivalent to 2 per cent equity. In total, the sale of up to 17.41 crore shares, or 5 per cent stake, is expected to generate approximately Rs 4,422 crore for the government.
Currently, the government maintains a 63.17 per cent stake in BHEL, with this disinvestment representing a strategic reduction in its holding. The successful execution of this OFS contributes to the government's broader disinvestment targets for the fiscal year.
Market Performance and Broader Disinvestment Context
During Wednesday's trading session, BHEL shares experienced some volatility, touching a low of Rs 258.60 before settling at Rs 260.65 at market close. This represented a decline of 5.58 per cent from the previous closing price, reflecting market adjustments ahead of the stake sale.
This transaction adds to the government's disinvestment proceeds for the current financial year. So far, the government has raised Rs 8,768 crore through various disinvestment initiatives in public sector undertakings. The BHEL OFS represents a significant component of this ongoing effort to optimize government holdings in state-owned enterprises while generating revenue for national development priorities.
The strong institutional response on the first day of bidding suggests continued investor interest in well-established public sector companies, even as market conditions fluctuate. The participation of retail investors on Thursday will provide further insight into broader market sentiment toward this strategic disinvestment.
