Government has invited preliminary bids for 26% strategic stake sale in BEML Limited which is engaged in manufacturing and supply of equipment for mining, construction, defence and rail projects.
The centre currently holds 54.03% in the publicly listed public sector enterprise (PSE) and intends to transfer management control along with strategic disinvestment through open competitive bidding route. It has appointed SBI Capital Markets Limited as its transaction adviser to advise and manage the strategic disinvestment process.
The company has a market capitalization of around ₹2500 crore and total revenue from operations of ₹3,028.8 crore in FY 20. It has three subsidiaries: Vignyan Industries Limited; MAMC Industries Limited; and BEML Brazil Industrial Ltd and BEML Midwest Ltd, a Joint Venture with Midwest Granite Pvt. Ltd. (MGPL) and P T Sumber Mitra Jaya of Indonesia. The stock price of BEML has gained 0.33% in last one month and ended at ₹972.15 on Friday.
PSEs with majority government stake have been barred from bidding for BEML. For other interested bidders, a minimum net worth of ₹1,400 crore and positive profit after tax in at least three of the immediately preceding five financial years has been set as the eligibility criteria.
“The successful bidder could be required to undertake certain obligations relating to certain matters, such as, employee protection, asset stripping, business continuity, lock-in of the shares acquired in the proposed transaction, and/or shareholding of consortium members in the SPV. These conditions, and those relating to the respective responsibilities and liabilities of the successful bidder and the consortium members (if any), shall be specified at the RFP (request for proposal) stage,” the bid document said.
The coronavirus pandemic has derailed government’s disinvestment plans for FY21. Government has so far garnered ₹12,225 crore through minority stake sales and IPO of Mazagon Dock Shipbuilders Limited against a record target of ₹2.1 trillion for FY21. It is, however, yet to carry out any strategic disinvestments so far this fiscal year. While the finance ministry had missed the disinvestment target of ₹65,000 crore for FY20 by ₹14,701 crore, it is likely to miss the target again due to the pandemic induced economic downturn.