BHEL OFS 2026 : 5% Government Stake Sale

The government has launched a BHEL OFS (Offer for Sale) to divest up to 5% stake in Bharat Heavy Electricals Ltd at a floor price of ₹254 per share, spread over 11–12 February 2026 for non‑retail and retail investors.

BHEL OFS 2026 – Key Details

• Company: Bharat Heavy Electricals Limited (BHEL), leading PSU engineering and heavy electrical equipment company under the Ministry of Heavy Industries.
• Offer structure:
  • Base offer: 3% stake – about 10.44 crore shares.
  • Green‑shoe / oversubscription option: additional 2% stake – around 6.96–7 crore shares.
  • Total potential OFS size: up to 5% – about 17.41–18.3 crore equity shares.
• Floor price: ₹254 per share, about 8% discount to the pre‑announcement close near ₹276–₹276.05 on BSE.
• Dates & categories:
  • 11 February 2026 (T‑day) – Non‑retail investors only (QIBs, mutual funds, HNIs, etc.).
  • 12 February 2026 (T+1) – Retail investors and employees; unallotted non‑retail bids can be carried forward.
• Retail quota:
  • Minimum 10% of offer shares reserved for retail investors (bids up to ₹2 lakh).
  • Retail can bid at cut‑off as well as at/above floor price, with final price discovered after non‑retail book.
• Employee quota:
  • Around 0.25% of equity (~0.87 crore shares) reserved for eligible BHEL employees; max ₹5 lakh per employee.
• Execution:
  • OFS via separate window on NSE (designated exchange) and BSE, 9:15 am–3:30 pm through member brokers.
  • Settlement handled by NSE Clearing Ltd; promoters/promoter group cannot participate.
• Govt proceeds:
  • At ₹254, 3% stake could raise about ₹2,653 crore; full 5% including green‑shoe could raise ₹4,422 crore+, supporting FY26 disinvestment targets.

Strengths / positives of BHEL OFS

• Attractive discount to CMP: Floor price of ₹254 implies around 8% discount to the pre‑OFS closing price (~₹276), offering institutional and retail investors an entry point below secondary market levels.
• Increased free float & liquidity: Government stake sale of up to 5% adds more shares to public hands, potentially improving float, volumes and price discovery over time.
• Part of planned disinvestment, not distress: OFS is a pre‑signalled CPSE disinvestment to meet fiscal goals and minimum public‑shareholding norms, not a company‑level fund‑raise or distress signal.
• Transparent SEBI framework: BHEL OFS follows SEBI’s standard OFS norms with clear quotas (MFs/insurance 25%, retail 10%), cut‑off option for small investors and exchange‑based bidding, reducing execution risk.
• Positive sector backdrop: The OFS comes after a period of strong order inflows and execution commentary in heavy engineering/energy PSUs, where BHEL has been in focus for defence, rail and green energy-related orders.

Risks / things to watch in BHEL OFS

• Supply overhang pressure: Announcing sale of up to 17–18 crore shares (≈5% stake) can create near‑term selling pressure, as seen in the initial share price slide (~5% intraday) when OFS opened.
• No fresh capital to BHEL: Proceeds go to the government, not the company, so there is no direct balance‑sheet or capex boost for BHEL itself from this OFS.
• Chance of cancellation / partial take‑up: Government can cancel the offer if non‑retail demand at or above floor price is insufficient on T‑Day, leading to uncertainty around size and signalling.
• PSU / policy risk: BHEL remains a PSU, so earnings trajectory and valuations are sensitive to government policy, order visibility from utilities and infra spending, and broader PSU sentiment.
• Headline disinvestment fatigue: Repeated stake sales across CPSEs sometimes lead to investor fatigue and valuation caps, especially if large supply coincides with weak markets.

FAQs

1. What is an OFS and why is BHEL doing it now?
An Offer for Sale (OFS) is a secondary share sale route where promoters (here, the Government of India) sell existing shares via stock exchanges. In BHEL’s case, the Centre is offloading up to 5% stake as part of its FY26 disinvestment programme and to increase public shareholding.

2. How much stake is the government selling in BHEL?
The government has launched a 3% base OFS (about 10.44 crore shares) with an option to sell an additional 2% (about 6.96–7 crore shares), taking the total to up to 5% of BHEL’s equity if the green‑shoe is fully exercised.

3. What are the BHEL OFS dates for retail and non‑retail investors?

• 11 February 2026 (Wednesday) – bidding for non‑retail investors only.
• 12 February 2026 (Thursday) – bidding for retail investors and employees, along with unallotted non‑retail bids carried forward.

4. What is the floor price for BHEL OFS and what discount does it offer?
The floor price has been set at ₹254 per share, which is roughly 8% lower than the previous close of around ₹276–₹276.05 on BSE before the announcement. Investors cannot bid below this price.

5. How can retail investors participate in BHEL OFS?
Retail investors (bids up to ₹2 lakh) can place orders through their brokers on the OFS window on 12 February during market hours, either at cut‑off price or at a specific price at/above the floor price, subject to availability in the minimum 10% retail quota.

6. Does BHEL OFS dilute existing shareholders or affect EPS?
The OFS is a promoter stake sale and does not change BHEL’s total equity capital, so EPS and book value per share remain unchanged. The key impact is increased free float and a change in promoter/public shareholding mix.

7. Is BHEL OFS positive or negative for long‑term investors?
For long‑term investors, BHEL OFS is neutral on fundamentals, mildly positive for liquidity and governance, but near‑term negative for stock price due to supply overhang. Actual outcome will depend on company earnings, order inflows and PSU sentiment, not just this event. This is not personalised advice.