Govt to Sell 3% Stake in BHEL via OFS at Rs 254 Floor Price; May Raise Up to Rs 4,422 Crore
Government Announces Stake Sale in BHEL
The Government of India has announced plans to divest up to 3% stake in Bharat Heavy Electricals Limited (BHEL) through an Offer for Sale (OFS). The floor price for the issue has been fixed at Rs 254 per share, offering investors an opportunity to participate in the stake sale of the state-owned engineering major.
The base offer comprises more than 10.44 crore shares, representing 3% of the company’s total equity capital. Additionally, the government has retained an oversubscription option to sell another 6.96 crore shares, equivalent to 2% equity. If this option is fully exercised, the total divestment could rise to 17.41 crore shares, amounting to a 5% stake in BHEL.
Fundraising Potential and OFS Details
At the specified floor price of Rs 254 per share, the government is expected to raise approximately Rs 2,653 crore from the 3% stake sale. If the additional 2% oversubscription option is exercised, the total proceeds could increase to around Rs 4,422 crore.
The OFS will be conducted through a dedicated window on both the BSE and NSE platforms. The sale is scheduled to take place during regular trading hours, beginning at 9:15 am and closing at 3:30 pm on Wednesday.
This move aligns with the government’s broader divestment strategy aimed at improving public sector efficiency and raising capital for fiscal management.
BHEL Share Price Performance
On the day of the announcement, BHEL shares closed at Rs 275.90, marking a gain of Rs 1.25 or 0.46% over the previous closing price. The stock traded comfortably above the OFS floor price, which may attract investor interest given the discount implied by the offer price.
Market participants will closely monitor subscription levels, especially from institutional investors, as the pricing and demand dynamics could influence short-term stock movement.
Strong Q3 FY26 Financial Performance
The stake sale announcement follows a robust December quarter performance by BHEL, reflecting a significant operational turnaround.
Net Profit Surges Over 200%
BHEL reported a net profit of Rs 382 crore for the quarter ended December 2025, compared to Rs 125 crore in the same period last year. This represents a sharp 206% year-on-year increase, driven by improved execution and operating leverage.
Revenue Growth and Operational Highlights
Revenue from operations rose 16% year-on-year to Rs 8,473 crore, up from Rs 7,277 crore in the corresponding quarter of the previous year. Total income, including other income, stood at Rs 8,700 crore, compared with Rs 7,393 crore a year ago.
The company benefited from:
- Improved project execution timelines
- A stronger and expanding order pipeline
- Better cost management and operating efficiency
Cost Structure and Margins
Total expenses for the quarter increased to Rs 8,188 crore, compared to Rs 7,224 crore in the year-ago period. Key cost components included:
- Cost of materials and services: Rs 6,059 crore
- Employee benefit expenses: Rs 1,531 crore
Notably, finance costs declined sequentially to Rs 182 crore from Rs 195 crore in the September quarter, providing additional support to profitability.
What This Means for Investors
The government’s decision to divest stake comes at a time when BHEL is demonstrating improved financial performance. For retail investors, the OFS presents an opportunity to buy shares at a predefined floor price, potentially at a discount to prevailing market levels.
However, investors should evaluate:
- Short-term price volatility post-OFS
- Long-term growth visibility in the capital goods sector
- Execution strength and order inflows in upcoming quarters
With a stronger earnings trajectory and continued policy support for infrastructure and energy projects, BHEL remains a key PSU stock to watch in the current market environment.
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