Bhel withdraws follow-on offer on volatile market

NEW DELHI: State-owned power equipment maker Bharat Heavy Electricals has withdrawn the papers for its proposed 5,000-crore follow-on public offer.

The company said the decision followed receipt of a no-objection certificate from the departments of heavy industry and disinvestment.

"We received instructions from the department of disinvestment that the draft red herring prospectus has to be withdrawn...probably the disinvestment would not happen through book-building process," BHEL chairman and managing director BP Rao said.

Sources in the heavy industries ministry said the issue has been withdrawn because of the current volatility in the stock markets. They said the government could look at other options of stake dilution.

BHEL had filed draft papers for the issue in September last year. The government had planned to offload 5% of its 67.72% stake in the company. Four merchant bankers -- Morgan Stanley, DSP Merrill Lynch, ICICI Securities and Kotak Mahindra Capital -- were appointed lead managers to the issue.