BHEL Buyback

The Board of Directors of BHEL approved a share buyback for its investors on Oct 25, 2018. The details of the buyback include:

 Record Date: November 6th, 2018

Buyback price: Rs. 86

Premium/Discount as per closing price on 16 Oct’18:  22.42% on Rs. 70.25

Buyback of shares: 18,93,36,645 equity shares (representing 5.16% of the total number of equity shares in the paid-up share capital of the company)

Amount of Buyback: Rs. 1628 crores (representing up to 5% of both the standalone and consolidated paid-up share capital and free reserves)

Shareholding Pattern: The government has 75% shareholding in the company i.e. 10,19,52,000 equity shares. The public shareholding is at 25% as per the listing agreements with the stock exchanges.

Shareholding with up to 3000 shares: 11,25,80,446  shares representing 3.06% of total 367,14,00,000 shares.

The maximum no. of shares held to qualify as small shareholder is 2325 shares. Reserved shares for retail investors is 2,84,00,496. Hence the acceptance ratio comes out to be 25.22%.

In the last 2 quarters since year end in March’ 2018, BHEL’s net profit has fallen by almost 60%. Company currently faces high competitive intensity due to lack of technological innovations, which combined with its inability to expand, would negatively impact revenue visibility in the coming years.

Considering the operational risks and very minimal growth in the future, we recommend investors to avoid the buyback.


Author Image