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Disinvestment of Bhel

In: Business and Management

Submitted By suparna
Words 592
Pages 3
DISINVESTMENT OF BHEL LTD

INTRODUCTION:-
Bharat heavy electrical limited is an integrated power plant equipment manufacturer and one of the largest engineering and manufacturing companies in india in relation to turnover. It was established in 1964. The company has been earning profits continuously since 1971-72 and paying dividends since 1976-77.
Its related to design, engineering, manufacture,construction,testing,commissioning and servicing a variety of products and services for the main sectors of the economy mainly Power, Transmission,Industry, Transportation(Railway), renewable energy, Oil and Gas and Defence. It has 15 manufacturing divisions and more than 150 project sites across india. It contributes 59% in india’s total installed generating capacity. It has its branches in over 75 countries globally.

DISINVESTMENT OF BHEL LTD:- * The government holds 67.72% holdings in BHEL Ltd. * The annual turnover target of the Ministry Of Disinvestment for the current financial year from disinvestment is around 40000 crores. * So the government has decided to sell 5% of its stake holdings to the public, which is expected to generate a revenue of about 4500 crores. * But the disinvestment has been currently put on hold due to the present market conditions. * The government wants to provide financial support and want to improve the efficiency of the enterprise. The company had some debts which is showed in the balance sheet. So in order to minimize those debts and pay their creditors, they can use the money which is coming from disinvestment. * If the selling of stake holding is done to private sectors, then the focus of the Public Sector Unit i.e. BHEL shifts from a pure service company to a profit making company’s stock prices. The stake holding of government will come down to 62.72% from 67.72% if at all it decides to disinvest. The 5%

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