In a significant disinvestment move, the President of India, acting through the Ministry of Heavy Industries, has announced an Offer for Sale (OFS) of equity shares in Bharat Heavy Electricals Limited (BHEL). The stake sale, conducted through a dedicated OFS window on both the BSE and NSE, opened on February 11, 2026, and triggered a sharp 6% decline in BHEL’s share price during intraday trade.
The government is initially offering up to 10,44,61,901 equity shares, representing 3.00% of BHEL’s total issued and paid-up equity share capital.
In addition, it has retained a greenshoe (oversubscription) option to sell up to 6,96,41,267 equity shares, equivalent to 2.00% of the total equity.
If fully exercised, the total divestment will amount to 5.00% of BHEL’s equity, translating to a potential sale of 17.41 crore shares.
The government currently holds 63.17% in BHEL, and this holding may reduce depending on the final subscription.
The floor price for the OFS has been fixed at ₹254 per equity share, each having a face value of ₹2. The floor price represents an approximately 8% discount to BHEL’s previous closing price of ₹276.05.
The OFS is being conducted over two trading days:
For non-retail investors, allocation under the BHEL Offer for Sale (OFS) will be done on a price priority basis at multiple clearing prices. A minimum of 25% of the total offer shares is reserved for Mutual Funds and Insurance Companies, ensuring significant institutional participation.
Institutional investors are permitted to place bids without any upfront payment, subject to confirmation from their custodians. However, non-institutional investors falling under the non-retail category are required to deposit 100% of the bid value upfront in cash or cash equivalents at the time of placing their bids.
Retail investors are defined as individual investors placing bids for shares with a total value of not more than ₹2,00,000. At least 10% of the offer shares are reserved for this category.
Retail participants have the option to bid at or above the Cut-Off Price, providing flexibility in pricing. Bidding for retail investors is scheduled for February 12, 2026, under the T+1 day of the OFS framework.
Under the employee reservation portion, up to 87,05,158 equity shares, representing approximately 0.25% of the total equity share capital, may be offered to eligible employees.
Employees can apply for shares worth up to ₹5,00,000. The allotment price for employees will be based on the Cut-Off Price determined in the non-retail category, ensuring alignment with the final discovered price in the OFS process.
Despite reporting strong quarterly results, BHEL shares declined sharply after the government’s Offer for Sale (OFS) opened for subscription. The announcement of the stake sale and the discounted floor price weighed on investor sentiment during early trade.
On the NSE, the stock fell 16 points, or 5.80%, to ₹260.10 at 11:20 a.m. Meanwhile, on the BSE, the share price dropped 5.74% to ₹260.20, shedding 15 points. During the session, the stock touched an intraday low of ₹259.30.
The decline is largely attributed to the 8% discount between the OFS floor price of ₹254 per share and the previous closing price of ₹276.05. Such discounted stake sales typically create short-term pressure on market prices as investors adjust to the lower offer price.
With this transaction, the Centre’s total disinvestment proceeds from public sector undertakings in the current financial year have reached ₹8,768 crore.
The stake sale follows a strong financial performance by BHEL for the quarter ended December 2025, reflecting improved execution and operating leverage.
The company reported a net profit of ₹382 crore for Q3 FY26, compared with ₹125 crore in the corresponding quarter of the previous year, marking a sharp year-on-year growth of 206%.
Revenue from operations rose 16% to ₹8,473 crore from ₹7,277 crore a year earlier. Total income, including other income, increased to ₹8,700 crore, up from ₹7,393 crore in the year-ago quarter, indicating stronger project execution and a healthier order pipeline.
On February 10, BHEL received a Letter of Acceptance (LoA) from Bharat Coal Gasification and Chemicals Limited (BCGCL) for a project valued at around ₹2,800 crore, excluding customs duty and GST. BCGCL is a joint venture between Coal India Limited, which holds a 51% stake, and BHEL, which owns the remaining 49%.
The contract pertains to the Syngas Purification Plant under the LSTK-2 package for BCGCL’s coal-to-2,000 tonnes per day ammonium nitrate project at Lakhanpur in Jharsuguda district of Odisha. Under the scope of work, BHEL will undertake design and engineering, equipment supply, civil works, erection and commissioning, as well as operations and maintenance services.As per the timeline, the project is expected to achieve preliminary acceptance, including commissioning and performance guarantee tests, within 42 months from the date of the LoA. Thereafter, operations and maintenance services will continue for a further period of 60 months.
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