BHEL OFS Opens: Govt Offers 5% Stake at 8% Discount

Introduction to the BHEL Stake Sale

The Government of India has initiated an Offer for Sale (OFS) to divest up to a 5% stake in the state-owned engineering company, Bharat Heavy Electricals Limited (BHEL). The announcement, made by the Department of Investment and Public Asset Management (DIPAM), sets the stage for a significant disinvestment event. The floor price for the offer has been fixed at ₹254 per share, which represents a discount of approximately 8% to the stock's closing price on the preceding day. This move is part of the government's broader strategy to reduce its holdings in public sector enterprises and enhance market liquidity.

Structure and Timeline of the Offer

The OFS is structured in two parts. The base offer consists of a 3% stake, which translates to over 10.44 crore equity shares. Additionally, there is a greenshoe option to sell another 2% stake, or approximately 6.96 crore shares, if the initial offer is oversubscribed. In total, up to 17.41 crore shares could be sold, potentially fetching the government around ₹4,422 crore if fully subscribed at the floor price.

The sale is scheduled over two days. On Wednesday, February 11, 2026, the offer will be open exclusively for non-retail investors. Retail investors will be able to place their bids on the following day, Thursday, February 12, 2026. A minimum of 10% of the offer shares are reserved for retail investors, who are defined as those placing bids for a total value not exceeding ₹2 lakh.

Key Details of the BHEL OFS

To provide a clear overview, the essential details of the Offer for Sale are summarized below.

Government's Disinvestment Strategy

This stake sale in BHEL is a component of the government's ongoing disinvestment program. The primary objectives are to increase public shareholding in Central Public Sector Enterprises (CPSEs), improve stock liquidity, and meet fiscal targets. For the current financial year, the government has so far raised ₹8,768 crore through PSU disinvestments. The OFS route is often preferred for its efficiency and transparency in executing stake sales while ensuring broad investor participation. The government's current holding in BHEL stands at 63.17%, which will decrease depending on the final subscription level of the OFS.

BHEL's Recent Financial Performance

The OFS comes at a time when BHEL has reported a strong performance for the quarter ending December 2025. The company's consolidated net profit saw a significant threefold jump to ₹390.40 crore compared to ₹134 crore in the same period last year. This growth was supported by a substantial increase in revenue, which grew 16.4% year-on-year to ₹8,473 crore. The company's EBITDA also rose by 79% to ₹546 crore, with EBITDA margins expanding from 4.2% to 6.4%, indicating improved operational efficiency.

New Business Development

In a separate positive development, BHEL recently secured a major order worth approximately ₹2,800 crore from Bharat Coal Gasification and Chemicals Limited (BCGCL). BCGCL is a joint venture between Coal India Limited (51%) and BHEL (49%). The contract is for a Syngas Purification Plant for a coal-to-ammonium nitrate project in Odisha. BHEL's scope includes design, engineering, supply, construction, and commissioning, followed by operations and maintenance. This large order strengthens BHEL's order book and provides visibility for future revenue streams, offering a positive counter-narrative to the potential short-term stock price pressure from the OFS.

Market Impact and Investor Outlook

The announcement of the OFS and its discounted floor price brought BHEL's stock into focus. Ahead of the news, BHEL shares closed at ₹276.05 on the BSE, up 0.53%. The floor price of ₹254 represents a notable discount, which is designed to attract investors. For traders, the OFS creates short-term volatility and potential arbitrage opportunities. For long-term investors, the stake sale could lead to improved liquidity and a wider investor base over time. The market will closely watch the subscription figures, especially from institutional investors, as a gauge of appetite for PSU stocks at current valuations.

Conclusion

The government's decision to sell up to a 5% stake in BHEL through an OFS is a key event for the company and the broader market. With a floor price set at a discount and strong recent financial performance, the offer presents a specific opportunity for investors. The successful completion and subscription level of the OFS will be a critical indicator of market sentiment and will influence the stock's trajectory in the near term. The outcome will also be significant for the government's disinvestment agenda for the fiscal year.