Home >companies >LIC buys 5.94% stake in BHEL

New Delhi: State-owned Life Insurance Corp. of India (LIC) has bought the government’s 5.94% stake in power equipment maker Bharat Heavy Electricals Ltd (BHEL) for 2,685 crore. After this share purchase, LIC’s stake in BHEL is 14.99%, up from 9.05%. LIC purchased 145.4 million shares, amounting to a 5.94% stake, in BHEL during 3-4 March through the open market route for 2,685 crore (184 apiece), BHEL informed stock exchanges.

The BHEL scrip closed at 173.55, up 3.92%, on the National Stock Exchange (NSE). The government held a 67.72% stake in BHEL at the end of December 2013. An empowered group of ministers, headed by finance minister P. Chidambaram, had decided last week that the insurer would acquire stake in the power gear maker. In August 2011, the cabinet had cleared sale of 5% stake in BHEL through a follow-on public offer (FPO). However, the heavy industry and public enterprises ministry was opposed to proposed disinvestment because of choppy market conditions.

The company in April 2012 withdrew the draft prospectus filed with market regulator the Securities and Exchange Board of India (SEBI). The government has so far raised about 5,093.87 crore through stake sale in public sector units (PSUs). As per the revised estimates in the interim budget, the disinvestment target was lowered to 16,027 crore in this financial year from 40,000 crore.

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