Strategic Update: Government Divestment & Order Book Expansion for BHEL

Executive Summary The Government of India, through the Department of Investment and Public Asset Management (DIPAM), is initiating a strategic divestment of up to 5% equity in Bharat Heavy Electricals Ltd (BHEL). Simultaneously, the company has bolstered its order book with a significant ₹2,800 crore mandate in the coal gasification segment, reinforcing its industrial capabilities amidst the upcoming liquidity event. 1. Capital Market Transaction: Offer for Sale (OFS) Divestment Structure: The government intends to offload up to 5% of its holding in the PSU major via the Offer for Sale route. Targeted Proceeds: The exchequer aims to mobilize approximately ₹4,500 crore through this tranche. Pricing Dynamics: Market intelligence suggests an indicative floor price in the range of ₹255 – ₹260 per share. This represents a discount of approximately 5.8% to 7.6% to the closing market price (CMP). Current Valuation: BHEL shares closed at ₹276.05 on the BSE (Feb 10, 2026), registering a gain of 0.53% intraday. Status: DIPAM is currently in the process of gauging banker feedback to finalize the timing and pricing metrics. 2. Operational Highlight: Major Order Win Counterbalancing the equity supply news, BHEL has secured a Letter of Acceptance (LoA) from Bharat Coal Gasification and Chemicals Limited (BCGCL), a Joint Venture between Coal India Ltd (51%) and BHEL (49%). Contract Value: ~₹2,800 crore (excluding taxes and duties). Scope of Work: The mandate covers the LSTK-2 package (Syngas Purification Plant) for the coal-to-ammonium nitrate project at Lakhanpur, Odisha. Deliverables: The contract is End-to-End (E2E), encompassing design, engineering, supply, civil works, erection, and commissioning. Timeline: Execution: 42 months for preliminary acceptance and performance guarantee tests. Recurring Revenue: Operations and Maintenance (O&M) services will continue for 60 months post-commissioning.