Government weighs strategic PSU tag for BHEL

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The move comes as the company diversifies into newer areas like electric mobility and nuclear and renewable power, and witnesses a reversal in its fortunes with large orders in the thermal power and railway segments.

Read this | BHEL’s fortunes poised for revival as order book fills up on demand for coal-fired power

“There is a consideration on the categorization of BHEL as strategic PSU. Now, that a parliamentary committee has also recommended the tag of strategic PSU for the company, there would be further thought on this,” said one of the two people cited above.

In its December report on the company, the committee on public undertakings noted that BHEL is actively engaged in various critical sectors such as hydro power, nuclear power, defence, space, renewable energy, and international operations and suggested that the government should consider categorizing BHEL as a strategic PSU.

“The committee feels that as India steadily asserts its position as a global leader, safeguarding its strategic interests becomes imperative, and BHEL has the potential to make substantial contributions under these circumstances. Therefore, the committee strongly recommends that the government consider bestowing upon BHEL the status of a strategic PSU,” the panel said in the report.

The concerned departments in the ministry of heavy industries, department of investment and public asset management (DIPAM), and the department of public enterprises are will likely consult on the matter.

The consideration, if takes a concrete shape, would keep BHEL out of the discussions for disinvestment.

Although the government is not actively discussing disinvesting from the company, BHEL was among the first companies to be considered for the disinvestment process. “Once categorized as strategic, it would be completely out of the stake sale considerations,” said another person.

Under the New Public Sector Enterprise Policy, the government identifies central PSUs in non-strategic sectors for closure or privatization in consultation with the concerned administrative ministries, NITI Aayog, department of expenditure, and the DIPAM.

Currently, about 63.17% of the company’s shares are held by the government, while the remaining 36.83% are with the public. Its shares on BSE were trading at 211.25, higher by 0.31% from their previous close.

Read this | Can BHEL reclaim its crown?

Its market capitalization currently stands at 73,593.41 crore.

It witnessed robust growth in its order book in the last fiscal year. It received orders worth nearly 78,000 crore in 2023-24, the highest ever in a fiscal, more than three times that recorded in the previous fiscal. In 2022-23, it received orders worth 23,548 crore. This is also a major jump from orders worth 11,470 in 2020-21.

The orders in the last fiscal were largely from the power sector, followed by railways, including orders for 80 Vande Bharat trains and 20 units of Super Rapid Gun Mounts (SRGM) for the Indian Navy’s warships.

The power ministry’s push to set up an additional 80 gigawatts of coal-based power projects in the country by 2032 has led to BHEL having a full order book for boilers in power plants.

“Our thermal power business witnessed a resurgence, securing orders worth 9.6GW and achieving 100% market share,” said the company’s annual report for FY24.

Further, the company would also focus on the transmission business as the need for a stable power grid grows with the addition of renewable power in the country. India targets 500 GW of non-fossil capacity by 2030.

The second person mentioned above said that currently, BHEL’s order book stands at 1.6 trillion, and the company has been asked to complete the outstanding orders where 85-90% of the work has been completed as soon as possible.

Also read | Fresh capital for PSU general insurers likely in budget

Queries sent to the MHI, DIPAM and the DPE remained unanswered till press time.

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