Government allows BEML to sell Rs4.9 crore equity

Mumbai: The government has allowed Bharat Earth Movers Limited (BEML) to raise funds through public issue of 49 lakh shares for its modernisation and expansion programme.

"The Cabinet Committee on Economic Affairs (CCEA) today gave its approval for allowing BEML to raise funds for its modernisation and expansion programme through public issue of 49 lakh shares of Rs10 each," finance minister P Chidambaram said after a meeting of the cabinet committee on economic affairs (CCEA).

The government holds 61.23 per cent stake in the company comprising 2.25 crore equity shares of Rs10 each, while individuals and other institutions hold 38.77 of the equity, the minister said.

"After the public issue, the government's stake would come down to 54 per cent with the balance 46 per cent being with institutions and the public," he said.

Chidambaram said the price band would be decided by the board of directors of the company on the written recommendation of the book running lead manager.

Defence and heavy machinery manufacturer Bharat Earth Movers is spreading its wings. The Bangalore-based PSU, which had net profit of Rs52.97, crore (Rs55.78 crore) for the three-month period ended December 31, 2006 plans to launch lubrication oil brand "BEML Oil". The company had a topline of Rs589.82 crore (Rs555.12 crore).

Other plans include trading of mineral ores for which BEML has inked an MoU with State Trading Corporation (STC). BEML Trading division would carry on the trading.

BEML has also entered contract mining with the company taking a 45 per cent stake in a joint venture with Hyderabad-based Midwest Granite and SMJ of Indonesia holding the balance. In another venture, BEML is manufacturing tyres for heavy mining equipments and trucks where it is working with Coal India.

BEML which currently has an order book of Rs2,053 crore(as of December 31, 2006) expects to close the current fiscal with an order book of Rs2,600 crore.