The Hindu : Business : Divestment in BHEL, Maruti next fiscal

Online edition of India's National Newspaper
Wednesday, Jan 26, 2005

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Divestment in BHEL, Maruti next fiscal

By Our Special Correspondent

NEW DELHI, JAN. 25. The Government is considering sale of 10 per cent shareholding in Bharat Heavy Electricals Limited (BHEL) and 7.5 per cent equity in Maruti Udyog Limited (MUL) in the next financial year in a bid to raise about Rs. 2,500 crores.

The Finance Minister, P. Chidambaram, and the Heavy Industries Minister, Santosh Mohan Dev, today agreed on the proposed disinvestment at a meeting but a final decision will be taken by the Cabinet and the Cabinet Committee on Economic Affairs on Thursday.

This was disclosed here by Mr. Chidambaram who said there was broad agreement between the two ministers on the issues to be presented for consideration to the Cabinet and the CCEA on disinvestment. He said the exact modalities of disinvestment in the two blue chip companies would be decided after the CCEA takes a formal decision on the issue.

With this move, the Government's shareholding in the Navaratna BHEL will fall to 57 per cent while in MUL, the equity stake will dip to 10.74 per cent. Earlier, Mr. Dev told newspersons after the meeting with Mr. Chidambaram that shares in BHEL and Maruti would be sold in the next fiscal as better value was expected at that time.

In the case of BHEL, he said it was likely to post good results this fiscal while MUL's performance had also been good. Based on current prices, he said sale of 10 per cent stake in BHEL would yield around Rs. 1,600 crores while MUL's shareholding of 7.5 per cent would help mobilise about Rs. 800 crores to Rs. 900 crores.

Mr. Dev said the Finance Minister had agreed to the suggestion that BHEL employees could buy as many shares as desired of the company.

On the utilisation of the disinvestment funds, he said money raised from sale of equity in Maruti and BHEL would be used for social sector schemes and even recapitalisation of the existing PSUs. Besides, he said Indian public and mutual funds would be given preference during the sale of shares of both companies.

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