In the first divestment proposal of the current fiscal, the Cabinet committee on economic affairs, scheduled to meet on Thursday, will decide on the sale of 10 per cent government holding in Bharat Heavy Electricals Ltd.
The agenda circulated for the meeting has also proposed a stock split of Bhel's shares with a face value of Rs 10 each. The details of the stock split will be finalised together by the departments of heavy industry and divestment.
At present, the government holds 67.72 per cent stake in the company.
The Divestment Development: Complete Coverage
The Bhel stock on Wednesday closed 0.3 per cent lower at Rs 870.15 on the Bombay Stock Exchange and 0.2 per cent lower at Rs 870.65 on the National Stock Exchange.
Bhel had a paid-up capital of Rs 244.80 crore (Rs 2.45 billion) at the end of March 2005. The sale of 10 per cent shareholding will be through the book-building route.
While the divestment department had initially proposed to sell 16 per cent government stake in Bhel, the heavy industry department had agreed to only 10 per cent along with 8 per cent divestment in Maruti Udyog.
The heavy industry department has also proposed that a portion of the public offer be earmarked for company employees.
The Bhel public offer is expected to be followed by a 15 per cent divestment in Shipping Corporation of India. A public offer of the government's Maruti shares is expected in the second half of 2005-06.
The government is also expected to sell off its remaining 44 per cent stake in Balco to Sterlite, while reserving 5 per cent for company employees.
From this year, the proceeds from divestment in public sector companies will go to the National Investment Fund. Such proceeds are proposed to be used for social sector spends and also for strengthening public sector companies.
While the government generated Rs 4,091 crore (Rs 40.91 billion) through divestment in the last financial year, no targets have been fixed for the current year.
