Apr 15, 2007

BEML files papers for Rs 450cr issue

The government's shareholding in Bharat Earth Movers (BEML) will come down to 54.63% from 61.23% after the Bangalore-based PSU's follow-on issue for around Rs 450 crore.

Mining and construction equipment maker BEML, which filed its draft document with Securities and Exchange Board of India late on Friday, is issuing 49 lakh shares through the offer comprising 11.77% of the diluted post-issue capital of the company.

The company plans to utilise the funds mobilised through the follow-on issue for its expansion plans including the setting up of a metro-coach manufacturing facility at Bangalore at a cost of Rs 214.51 crore.The retail portion of the issue is for 15, 43,500 lakh shares or nearly 35% of the share issue. Currently, retail investors hold only 9.22% of the equity capital.

Domestic mutual funds hold 13.40% stake in the company while foreign funds own 6.26%.Shares of BEML are trading at around Rs 1,000-levels, but analysts expect the bankers to price the follow-on issue at a discount to the market price.

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