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Our Bureau

New Delhi , May 26

THE Cabinet has given clearance to the Government to sell 10 per cent stake in Bharat Heavy Electricals Ltd (BHEL) through the book-building route.

Briefing newspersons after the meeting, the Finance Minister, Mr P. Chidambaram, said the proceeds would not be reflected in the Budget but would go into the National Investment Fund (NIF), of which 75 per cent would be utilised for projects related to health and education and the remaining 25 per cent would be used for reviving sick public sector units.

Currently, the Government holds 67.72 per cent stake in BHEL; this would come down to 57.72 per cent after the sale. The equity shares, with a present face value of Rs 10 each, would be split to enable small investors participate in the issue, the Minister said.

But the exact ratio of the split would be decided in consultation with the Department of Heavy Industries and the Department of Disinvestment, and the price would be fixed after the lead manager to the offer is appointed, Mr Chidambaram said.

The Finance Minister stated that the Left parties had been consulted on the issue.

Reconsider decision: Left

However, the Left parties have opposed the Government decision to sell stake in a navaratna PSU and have asked it to reconsider, since it is against the principles laid down in the National Common Minimum Programme (NCMP).

The proposal okayed by the Cabinet today reserves 15 per cent of the offer for BHEL employees.

BHEL stock prices reacted strongly following the decision in the morning, the scrip reaching a 52-week high of Rs 918 compared to Wednesday's closing price of Rs 870.15. The scrip finally closed at Rs 909.85. At this price, the Government would mop up around Rs 2,183.64 crore from the sale.

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