Why disinvestment can break the shackles around BHEL

Mumbai: Under the spotlight of disinvestment, power equipment producer BHEL Ltd may be just beginning to lighten up. The stock surged 27.5% in trade today to ₹56.8, which takes the market value of the company to about ₹19,800 crore. This should fetch the government decent sums if a significant chunk is divested.

Nevertheless, risks to growth look skewed on the downside in its thermal power business. Hence, BHEL has been expanding into new sectors such as E-mobility, EV-charging, transportation and defence. EV stands for electric vehicles. BHEL plans to target about 50% of revenues from these new businesses over the next five years. This appears to make BHEL an interesting candidate for private players.

Of course, despite talk of entering into these new businesses, the BHEL stock had been languishing near 15-year lows.