Is the government also planning an OFS in Bharat Dynamics Ltd?
Answer
It looks like the government is planning to make hay while the sun shines and is targeting defence OFS issues in the aftermath of the big announcement last month about in-sourcing more of defence manufacturing to Indian companies. BDL had appreciated sharply.
Now the Government is looking to capitalize on the defence buzz and dilute its stake in Bharat Dynamics Ltd, another major public sector defence company. This comes hot on the heels of the Rs.5020 crore OFS by HAL last week, which also leveraged the defence story.
The Indian Government will look to sell around 18.30 crore shares as part of the OFS and will also incidentally retain the right to sell more if there existed demand in the market. The floor price for the OFS is set at Rs.330, a 14% discount to the company’s closing stock price.
Currently, the government of India holds 87.75% in Bharat Dynamics and like in the case of many PSUs, here also it is looking to reduce its stake to 75%. This is in line with the SEBI stipulations, but more importantly, defence is a good story that can be sold in the market.
Yes. It's true and good for the company.