Bharat Heavy Electricals Ltd announced on Monday its board has recommended the divestment of 5 per cent Government stake in the state-owned equipment major.
No indication was made of the timing of the possible stake sale by the Government, which owns close to 69 per cent of BHEL. The company also announced an “in principle” clearance to the splitting of its Rs 10 stock into five shares of Rs 2 each. The company shares slumped sharply on the announcement, closing down 6.7 per cent at Rs 1,935.60 a share on the BSE.
The divestment proposal, which at current market prices could fetch up to Rs 5,000 crore to the government coffers, needs a final clearance by the Government. Market players said the stock spilt has been announced largely to accommodate the FPO proposal.
Net profit jumps 40%
The company also announced audited results for the fourth quarter of last fiscal, which showed a 40 per cent jump in consolidated net profit at Rs 6,053 crore.
The equipment major's total income on a consolidated basis rose 25 per cent to Rs 43,435 crore during the quarter ended March 31, 2011.
The topline and bottomline for the fiscal have been boosted due to a change in the company's accounting policy.
“The impact due to a change in the accounting policy for the year 2010-11 is increase in turnover by Rs 2,772.79 crore, provision for contractual obligation by Rs 2,077.31 crore and profit before tax by Rs 695.48 crore,” a filing done by the company on the BSE said.
The equipment firm's board of directors recommended a 179 per cent dividend, amounting to Rs 17.90 a share for the year 2010-11. This would be in addition to an interim dividend of Rs 13.25 a share.