Bharat Earth Movers Limited (BEML) is hiving off its land assets business from its core business. This will help it to specify the real value of its core business and fixed assets separately, in order to fast-track privatization.
The state-run player’s shares are currently locked at ₹ 1614.05 apiece on the National Stock Exchange (NSE). They rallied 10% in the past two days as they hit a 5% upper circuit consecutively, amid reports that the Central Government is revisiting plans for the strategic stake sale in this public sector entity.
The Ministry of Corporate Affairs approved the demerger of land and non-core assets of BEML to BEML Land Assets Ltd., earlier this month. Shareholders of BEML will get shares of BEML Land Assets and the process of the demerger is expected to be completed in the near term.
The government invited preliminary bids for selling a 26 per cent stake in BEML along with the management control, in January last year. These financial bids are expected in the October-December quarter and the draft share purchase agreement too might be finalized by then. Reports suggest that the government might soon issue an expression of interest (EOI) for strategic divestment in the company.
Bengaluru-based BEML is an Indian defence public sector undertaking that manufactures a variety of heavy equipment, such as that used for earth moving, transport and mining.
The government currently holds a 54.03% stake in it and the divestment was delayed multiple times due to hurdles related to the demerger of its assets. The said divestment of a 26% stake could fetch around ₹2,000 crores to the exchequer.
The government has already raised ₹ 24544 crores through disinvestment in the current financial year against a full-year budget target of ₹ 65,000 crores.
BEML Land Assets Ltd will soon be listed on the exchanges after receiving the corporate ministry’s approval.
BEML will host its 58th annual general meeting (AGM) on Friday, September 23, 2022, where its board may consider the announcement of dividends for its shareholders.
Written by Simran Bafna
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