The Government of India has announced a major disinvestment move in Bharat Heavy Electricals Limited (BHEL), with plans to offload up to 5% stake through an Offer for Sale (OFS). The sale, conducted by the Ministry of Heavy Industries, is expected to raise approximately ₹4,422 crore if fully subscribed.
The OFS opened on February 11, 2026 for non-retail investors and will continue on February 12, 2026 for retail investors and employees. The floor price has been set at ₹254 per share, representing an 8% discount to the previous closing price.
Key Highlights
- Offer Size: Up to 17.41 crore equity shares (5% of total paid-up capital).
- Base Offer: 3% stake, with an option to sell an additional 2% if oversubscribed.
- Floor Price: ₹254 per share.
- Employee Quota: 0.25% of equity reserved (~87 lakh shares).
- Market Reaction: BHEL shares fell 5.5–6% in early trade following the announcement.
Analysis of BHEL OFS
| Factor | Before OFS | During OFS | Outcome Expected |
|---|---|---|---|
| Government Holding | Higher stake | Reduced by up to 5% | Disinvestment proceeds |
| Share Price | ₹277 (previous close) | Fell to ₹259–261 after OFS news | Short-term pressure |
| Investor Access | Limited | Non-retail, retail, employees | Wider participation |
| Market Sentiment | Stable | Volatile due to discount pricing | Mixed reactions |
| Fiscal Impact | No immediate inflow | ₹4,422 crore if fully subscribed | Boost to government revenue |
Comparative Analysis of PSU Disinvestments
| Company | Stake Sale % | Floor Price | Amount Raised | Market Reaction |
|---|---|---|---|---|
| BHEL | 5% | ₹254 | ₹4,422 crore (expected) | Shares fell 6% |
| Coal India | 3% | Discounted | ₹5,000 crore | Mild correction |
| NTPC | 4% | Discounted | ₹3,800 crore | Stable |
| ONGC | 2.5% | Discounted | ₹2,900 crore | Slight dip |
Drivers Behind the OFS
- Government’s Disinvestment Target: Part of broader fiscal strategy to raise funds.
- Market Liquidity: Attracting institutional and retail investors with discounted pricing.
- Employee Participation: Reserved quota to encourage internal ownership.
- Revenue Generation: Expected inflow of ₹4,422 crore if fully subscribed.
- Strategic Move: Reducing government stake while retaining majority control.
Public and Market Reaction
- Investors: Mixed response; some see opportunity in discounted pricing, others worry about short-term volatility.
- Analysts: Highlighted the OFS as part of India’s aggressive disinvestment program.
- Media: Coverage focused on the sharp fall in BHEL shares post-announcement.
- Employees: Welcomed reserved quota, though concerns remain about long-term valuation.
Future Outlook
- Short-Term: Share price volatility likely until OFS concludes.
- Medium-Term: Increased retail participation may stabilize stock.
- Long-Term: Government’s reduced stake could improve corporate governance and efficiency.
Challenges ahead:
- Ensuring full subscription of OFS.
- Managing investor sentiment amid falling share prices.
- Balancing fiscal needs with PSU stability.
Conclusion
The government’s decision to cut 5% stake in BHEL via OFS marks a significant step in its disinvestment strategy. While the discounted floor price has triggered short-term volatility, the move is expected to raise ₹4,422 crore and broaden investor participation. For long-term investors, the OFS presents both risks and opportunities, depending on how BHEL’s fundamentals and market sentiment evolve post-disinvestment.
Disclaimer
This article is intended for informational and analytical purposes only. It summarizes publicly available updates on the BHEL OFS and its impact on markets. It does not constitute investment advice, insider information, or professional consultation. Readers are encouraged to verify facts independently and consult financial experts before making investment decisions.
