Saturday, January 28, 2017

Centre to divest 26% stake in BEML; Employees protest the move

THE Centre has kick-started the process for ‘strategic sale’ of equity stakes in PSUs with an approval for divestment of 26 per cent stake in BEML. Currently, the Centre has a 54.03 per cent stake in BEML. The rest 46 percent is held by public, financial institutions, foreign institutional investors, banks and employees.
However, the Centre’s decision to disinvest 26 percent stake to private players has been opposed by the employees’ union. Workers have questioned the move and said BEML’s annual...
turnover is around Rs. 3,500 crore, and it has been making profit continuously since 1964. They maintained that BEML is the only native entity that supplies equipment such as tetra trucks, missile launchers and ground support vehicles to the defence sector.
The Department of Investment and Public Asset Management (DIPAM) has sought bids for engagement of a “transaction advisor” for strategic disinvestment of BEML, media report said quoting official sources. The transaction advisor is expected to provide advisory services and manage the disinvestment process.
The strategic sale approval is just the third in over 12 years. In September, the Cabinet had cleared strategic sale of Bharat Pumps and Compressors Ltd, while in December it had approved sale of India's first pharma company Bengal Chemicals and Pharmaceuticals Ltd as well as Hindustan Antibiotics Ltd. These are among the public sector units that NITI Aayog has identified for sale of government's majority stake to private companies in order to bring in greater efficiency and professionalism in their functioning.
BEML Limited (formerly Bharat Earth Movers Limited) was established in May 1964 as a PSU for manufacture of rail coaches and spare parts and mining equipment at its Bangalore complex. The PSU has partially disinvested and presently Government of India owns 54 percent of total equity and.
A Miniratna-Category-1’ PSU, BEML plays a pivotal role and serves India’s core sectors like defence, rail, power, mining and infrastructure. The PSU started with a modest turnover of Rs.5 crore during 1965 and today, due to its diverse business portfolio, the PSU has been able to achieve a turnover of more than Rs 3,500 crore. Its three major business verticals viz, mining and construction, defence and rail and metro are serviced by its nine manufacturing units located at Bangalore, Kolar Gold Fields (KGF), Mysore, Palakkad and subsidiary - Vignyan Industries Ltd, in Chikmagalur district. BEML’s products are exported to more than 56 countries. As part of company’s globalization strategy, the PSU has expanded its global reach by opening local company at Indonesia and Brazil recently in addition to Malaysia and China offices.
The PSU also plans to take up overhaul and upgradation of battle tanks with a view to assemble and roll out the products.
Centre has already garnered Rs 23,500 crore (before the recent Central Public Sector Enterprises Exchange Traded Fund) this fiscal through share sales and share buybacks by the companies.

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