Tata Motors, Mahindra and Mahindra and Ashok Leyland are among the six companies that have their eyes set on a 26 percent stake in the state-run BEML, the biggest defence, mining and construction and rail coach manufacturer in India, Mint reported.

Share Market Live

NSE

Besides the big three, Bharat Forge and Megha Engineering and Infrastructure may also submit their expressions of interest, the report said, quoting two people privy to these developments.

Tata, Mahindra and Ashok Leyland are eyeing stakes in BEML to give a fillip to their defence ventures and diminish too much dependence on commercial vehicle business, the report said.

On January 4, the centre, which has a 54 percent stake in BEML, invited bids for a 26 pecent stake in the defence PSU and transfer of management control.

“For auto companies, BEML is a major competitor in the tenders and would eventually win a lot of them since it’s state-controlled. Hence, it makes sense for these companies to acquire the heavy-vehicle manufacturing company," a senior executive from one of the firms cited above said, requesting anonymity.

Another person aware of the developments said once the expressions of interest have been submitted, SBI Capital Markets Ltd will inform the shortlisted bidders of the next stage.

BEML Limited, previously Bharat Earth Movers Limited, manufactures heavy defence equipment, including Prithvi missile launcher, army vehicles, and railway and metro coaches. The company has nine manufacturing units in Bengaluru, Kolar Gold Fields, Mysuru, Palakkad and Chikkamagaluru.

Over the past month, the stock price of BEML has rallied 24 percent to Rs 1170.

In her budget speech this year, Finance Minister Nirmala Sitharaman said the centre's new central public sector enterprise (CPSE) policy, would help privatise non-strategic state-owned companies, adding the government plans to keep the “bare minimum" CPSEs in four strategic sectors and privatise the rest or close down unviable ones.

The four strategic sectors mentioned by Sithraman are atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; banking, insurance and financial services.

The government hopes to generate Rs 1.75 trillion from disinvestment receipts in the coming fiscal.

The central government couldn't meet its Rs 2.1 trillion disinvestment target for the FY21 by a big margin and was left with no other option but to push key transactions such as privatisation of Air India and Bharat Petroleum Corporation to the next fiscal year.