Plans of the Indian government to divest in BHEL were shelved today citing the company's low share price. Furthermore, the government said that there is a lowered capital spending in the company.
And added with the low demand in the local energy sector, sources say these aforementioned reasons have made the Indian state administration withdrew its 5% divestment proposal in BHEL.
On the Bombay Stock Exchange today, BHEL's shares declined 19.64% to RS120.05 after the company registered a second quarter net gain of RS465.43, equal to half of what it gained last year. The scrip was reduced by 60% since the company's initial public offering in 2011.
"The power sector itself is not doing well, which has depleted BHEL's order book. The share price has also been taking a beating and so the DoD decided to withdraw the disinvestment proposal," commented an Indian official regarding the divestment postponement.
According to analysts, slow prospects in the local power industry and competitive imported rivals affected the operations of BHEL.
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