Government raises Rs. 770 cr from Bharat Dynamics stake sale.

The government has raised Rs. 770 crore from stake sale of ammunition and missile systems manufacturer Bharat Dynamics Ltd. through an offer for sale, which concluded on Wednesday.

“BDL OFS concluded today with a total subscription of about 2.34 crore shares worth Rs. 770 crore from institutional and retail investors,” secretary of department of investment and public asset management (DIPAM) Tuhin Kanta Pandey said.

“This issue will help the company achieve minimum public shareholding (MPS) norms,” he said in a Twitter post.

The government had planned to sell 15% of its 87.75% shareholding in the defence central public sector enterprise via OFS, with the intent of getting over Rs 900 crore. It had kept the shares at a floor price of Rs. 330 apiece. While the OFS was subscribed 1.40 times by non-retail investors, including the government, which decided to exercise the green shoe option, the retail portion of the OFS saw fewer takers despite a Rs. 20 per share discount.

This was the second divestment via offer for sale by the government in the current financial year. Last month, the government sold shares of another defence CPSE, Hindustan Aeronautics Ltd NSE -3.55 %, for over Rs. 5,000 crore.

The government has set an ambitious disinvestment target of Rs. 2.1 lakh crore for FY21. Of this, Rs. 1.20 lakh crore is to come from disinvestment of public sector undertakings and another Rs. 90,000 crore from stake sale in financial institutions.

Strategic divestment of Air India, Bharat Petroleum Corporation Ltd., Container Corporation of India and Shipping Corporation of India has been impacted due to the Covid-19 pandemic. However, decks have been cleared for public listing of India’s largest public sector insurer LIC of India.

ET