New Delhi: India will consider selling a stake in Bharat Heavy Electricals Ltd (Bhel), a minister said on Friday, as the government plans to encourage state-run firms to raise funds needed to expand operations at home and globally.
Stake sale plans for state-run firms were revived soon after the Congress party-led coalition was re-elected in May with a stronger majority. The cash-strapped government is looking at options to cut its bloated fiscal deficit.
“Point of disinvestment is still under consideration. Government has definitely a positive thinking on that line,” heavy industries minister Vilasrao Deshmukh said, referring to the leading maker of large electrical equipments.
Asked if his ministry could consider sale of up to 10% in Bhel, he said: “We are not averse to it.”
If realized, it could fetch about $2.1 billion (around Rs10,100 crore) based on the current market price of the company, in which the government owns 67.7%. The remainder is held by the public.
In 2005, India had proposed stake sale in Bhel and other state-run firms, but the move was shelved on stiff opposition from the coalition’s communist allies.
The Left parties, who had later pulled their support from the ruling coalition, were roundly beaten in the national elections that ended last month. The government has now decided to revive divestments without diluting its holding below 51% in state companies.
National Hydroelectric Power Corp., Oil India Ltd, Coal India Ltd, Bharat Sanchar Nigam Ltd and Air India have been named for divestments.
Deshmukh said the proposal for Bhel’s stake sale should come from the finance ministry. “Once they decide, we will think of it,” he said, declining to give a time frame. Bhel’s top brass are scheduled to meet Deshmukh on Monday.
PTI contributed to this story.