Shares of Bharat Heavy Electricals Limited (BHEL) fell 5.6 per cent to ₹260.65 in morning trade on Wednesday, February 11, after the government announced plans to divest up to 5 per cent of its stake in the state-run power equipment maker through an offer for sale (OFS).
The stock opened at ₹261.90 and touched a low of ₹259.25 during the session, with trading volume reaching 208.75 lakh shares by 10.28 am. The counter saw higher selling pressure, with 61.49 per cent sell orders against 38.51 per cent buy orders.
OFS Details and Timeline
The Department of Investment and Public Asset Management (DIPAM) announced the stake sale, with Secretary Arunish Chawla confirming on X that the government will divest 3 per cent equity with an additional 2 per cent greenshoe option.
The OFS opened for non-retail investors, including qualified institutional buyers and high net-worth individuals, on Wednesday, February 11. Retail investors can participate on Thursday, February 12. Both categories will have access to the dedicated OFS window during regular market hours from 9.15 am to 3.30 pm.
Floor Price and Discount
The government has set the floor price at ₹254 per share, representing an 8 per cent discount to BHEL’s previous closing price of ₹276.10 on the NSE. At current market levels around ₹261, the floor price offers a roughly 2.7 per cent discount.
Stake Size and Fundraising Target
The base issue comprises 10.45 crore shares, representing 3 per cent of the company’s outstanding capital. The government retains a greenshoe option to sell an additional 6.96 crore shares (2 per cent), taking the total potential divestment to 17.41 crore shares or 5 per cent of equity.
At the floor price, the base 3 per cent stake sale is expected to raise approximately ₹2,650 crore. If the greenshoe option is fully exercised, the total deal size could reach ₹4,422 crore.
The seller is the President of India, acting through the Ministry of Heavy Industries, which currently holds a 63.17 per cent stake in BHEL.
Allocation Structure
Non-retail investors can bid for 90 per cent of the offer size—15.67 crore shares worth ₹3,980 crore—on Wednesday. Retail investors, defined as those bidding up to ₹2 lakh, will have access to 10 per cent of the offer—1.74 crore shares worth ₹442 crore—on Thursday.
Analyst View: Limited Appeal for Retail Investors
Abhinav Tiwari, Research Analyst at Bonanza, advised caution on the OFS. “The BHEL OFS is a government stake sale, not a fresh issue. The GOI is selling up to 3 per cent stake plus 2 per cent greenshoe at a floor price of ₹254. The money will go to the government, not to BHEL. So this does not directly improve BHEL’s balance sheet or reduce debt. It is mainly part of the government’s disinvestment plan,” he said.
“At first glance, the floor price offered about an 8 per cent discount to the earlier market price of around ₹276. However, after the announcement, the stock corrected to around ₹260 levels, so the effective discount narrowed to just 2-3 per cent. This means the OFS is not a deep bargain. Even at ₹254, BHEL trades at relatively high valuation multiples compared to its return ratios, which are still modest,” Tiwari added.
“From a valuation perspective, BHEL is still trading at relatively high multiples compared to its current return profile. While earnings have improved and the order book is strong above ₹2 lakh crore, return ratios like ROIC and ROCE are still modest. A large part of the capex revival and earnings recovery seems already priced in. We believe investors can avoid applying given limited discount, rich valuation, PSU overhang, and execution risks in large EPC projects,” he said.
Q3 FY26 Results
BHEL reported strong quarterly earnings ahead of the OFS. Net profit for the December 2025 quarter jumped 206 per cent year-on-year to ₹382 crore from ₹125 crore in the same period last year.
Revenue from operations rose 16 per cent to ₹8,473 crore from ₹7,277 crore, reflecting improved project execution. Total income, including other income, stood at ₹8,700 crore against ₹7,393 crore a year earlier.
Total expenses increased to ₹8,188 crore from ₹7,224 crore, with material and service costs rising to ₹6,059 crore. Employee benefit expenses edged up marginally to ₹1,531 crore. Finance costs declined sequentially to ₹182 crore from ₹195 crore in the September quarter.
Recent Order Win
On February 10, BHEL secured a letter of acceptance from Bharat Coal Gasification and Chemicals Limited (BCGCL) for a project valued at approximately ₹2,800 crore, excluding customs duty and GST.
The order covers 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, Odisha. BCGCL is a joint venture between Coal India Limited (51 per cent) and BHEL (49 per cent).
BHEL will handle design, engineering, equipment supply, civil works, erection, commissioning, and operations and maintenance. The project is expected to achieve preliminary acceptance within 42 months, with O&M services continuing for another 60 months.
Stock Performance
BHEL shares have declined 10.62 per cent year-to-date but remain up 30.44 per cent over the past year. The stock touched a 52-week high of ₹305.90 on January 7, 2026, and a 52-week low of ₹176 on March 3, 2025.
The company’s total market capitalization stood at ₹90,759.98 crore, with a free float market cap of ₹33,395.44 crore. The stock trades at a price-to-earnings ratio of 126.49.
Published on February 11, 2026
