Government has received multiple bids from parties interested in buying it’s stake in Bharat Earth Movers Ltd (BEML), the department of investment and public asset management said Monday.
“Multiple expressions of interest received for the privatisation of BEML. The transaction will now move to the second stage,” DIPAM secretary Tuhin Kanta Pandey said on Twitter.
The government will disinvest 26% equity share capital of the Bengaluru-based public sector enterprise out of its shareholding of 54.03% along with management control, through a two-stage competitive bidding process.
DIPAM had set the minimum net worth requirement for bidders at Rs 1,400 crore. Companies, limited liability partnerships (LLPs) and funds eligible to invest in India can participate in the bidding process. Government companies, however, have been barred from participating.
Consortium bidding has also been permitted where lead member must have a minimum 51% stake in the consortium. The lead member should have profit after tax in at least three years out of immediately five preceding years.
Non-core land and assets will be hived off and will not be a part of disinvestment, as per details in the preliminary information memorandum. SBI Capital Markets Ltd (SBICAP) will be the transaction advisor to advise and manage the strategic disinvestment process.
Bharat Earth Movers manufactures a variety of heavy equipment, such as that used for earth moving, transport and mining. At the current market price, a 26% sale could fetch about Rs 1,000 crore to the exchequer. Shares of BEML closed at Rs 1,384.4, up 3.8%, on BSE.
The government is aggressively going ahead with privatisation of state-run companies such as Bharat Petroleum Corporation Ltd, Container Corporation of India, Shipping Corporation of India and Air India.
It had set a disinvestment target of Rs 2.1 lakh crore for the fiscal year ending March 2021. The target has been lowered to Rs 32,000 crore in the revised estimates issued during the FY22 Budget. So far, it has received proceeds of Rs 31,005 crore, largely from buybacks and offers for sale.