NEW DELHI: The government will sell 26% stake in defence equipment manufacturer BEML, making it the first major PSU to be sold through strategic disinvestment, which may fetch the exchequer over Rs 1,000 crore.
In a notification to the stock exchanges, BEML said that the Cabinet has given an ‘in-principal’ approval for strategic disinvestment of 26% equity shares in BEML out of the government’s shareholding of 54.03%.
At the current market pricing of Rs 999.50 a share, 26% stake of BEML could fetch the exchequer over Rs 1,000 crore. After the strategic sale, the government’s stake in the PSU would come down to 28.03%.
“The said shareholding would be sold to the strategic buyer/s to be identified by the government of India by following due procedure,” BEML said.
The strategic sale approval is just the third in over 12 years. In September, the Cabinet had cleared strategic sale of Bharat Pumps and Compressors, while in December it had approved sale of India’s first pharma company Bengal Chemicals and Pharmaceuticals as well as Hindustan Antibiotics.
These PSUs will be the first privatisation since sale of Jessop and Co in 2003-04 under the NDA government headed by Prime Minister Atal Bihari Vajpayee.
These are among the public sector units that Niti Aayog has identified for sale of government's majority stake to private companies in order to bring in greater efficiency and professionalism in their functioning.
Established in May 1964, BEML operates on three major business verticals for associated equipment manufacturing — mining and construction, rail and metro and defence and aerospace. Its turnover has risen to more than Rs 3,500 crore.
The PSU, under the administrative control of defence ministry, provides equipment support to Indian Army and other defence forces by manufacturing variants of Tatra vehicle for all terrain operation.