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Bharat Electronics Offer for Sale (OFS) Review 22nd Feb 2016

Published on Tuesday, February 21, 2017 by Dilip Davda | Modified on Monday, November 4, 2019

Bharat Electronics Offer for Sale (OFS) Review 22nd Feb 2016

Of late we found Government of India is doing disinvestment's through CPSE of OFS routes and trying to reach target of disinvestment for the current fiscal. After the sudden OFS of MOIL in last month, the Govt Of India is now bringing OFS of Bharat Electronics Ltd (BEL) that starts today (22.02.17) and will close on 23.02.17. Details of the said offer for sale are as under:

Bharat Electronics OFS Detail

BEL Offer For Sale

Issue Date (Non Retail Investors) 22 Feb 2017
Issue Date (Retail Investors and Non Retail Investors) 23 Feb 2017
Issue Timings 09:15 to 15:30
Offer Size for Retail Investors 22,33,628
Offer Size for Non Retail Investors 89,34,511
Floor Price 1,498.00
Lot Size 1
Minimum Bid Quantity 1
Maximum Bid Quantity 1,11,68,139
Discount to Retail Investors 5% to the Cut off price

Bharat Electronics Limited OFS Bidding Status

BEL OFS Subscription Detail

Date Total Issue Size Total Subscription No. of Times
22nd Feb 2017 89,34,511 2,09,00,188 2.34 times
23nd Feb 2017 22,33,628 1,18,65,159 5.31 times

BEL is a defense sector PSU, coming out with a OFS of 11168139 equity share of Rs 10 each with a floor price of Rs 1498.00. Issue will open on 22.02.17 for Non-Retail investors and on 23.02.17 for Retail investors who are getting 5 per cent discount on the cut off price. Non-retail investors have option to carry forward their bids for the following day i.e. on 23.02.17. Offer size for Non-Retail is 8934511 shares and 2233628 shares for Retail investors. Application is to be made during the trading hours of the bourses (BSE and NSE) and the minimum lot is 1 share with a Tick Price of Rs 0.05 per share. Floor price is fixed at Rs 1498 and the allotment will be done on price priority basis.

The company suffered a setback for the quarter ended 30.06.16, but thereafter it is on a fast forward mode with higher top and bottom lines.

The President of India, acting through and represented by the Ministry of Defense, Government of India is the seller promoter and the selling members will be 1)SBICAP Securities Limited (Clg.No 95),ICICI Securities Ltd (Clg.No 103), Edelweiss Securities Ltd (Clg No 121) and Deutsche Equities India Private Limited (Clg. No 905).

The counter of this company closed at Rs 1559.95 (BSE) and Rs 1558.50 NSE) on 21.02.17 (with a 52 week high/low of Rs 1624-1009), thus the offer is at a discount of around 3.95 per cent to closing market price on the previous eve. Scrip code on BSE is 500049 and on NSE BEL.

At the 21.02.17 closing price, the company's market cap is around Rs 34842 crore.

Conclusion: As Government has increased defense spending, this company is set for bright prospects ahead. Investors may consider investment for medium to long term rewards.

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About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com


30 Comments

30. Lucky   I Like It. | Report Abuse |   Link | Mar 21, 2017 9:08:22 PM Reply
Is there any information of the allocation for BEL OFS. Its almost 1 month, still no allocation or status of allocation.
29. Ravi Shankar   I Like It. | Report Abuse |   Link | Mar 15, 2017 1:23:42 PM Reply
Please update me where i can see the allotment stats.
28. RPS   I Like It. | Report Abuse |   Link | Mar 13, 2017 7:14:54 PM Reply
Sir, i do not understand the method of discount in ofs........
As per my view, 1498/- was the floor price and 5% discount was given to retail investors means - it should be near about 1423/-. If this calculalation is not true , then companies should clear before launching OFS......
27. RPS   I Like It. | Report Abuse |   Link | Mar 12, 2017 5:58:43 PM Reply
Retail investors should get ofs in least price to encourage them towards investment .......
26. RPS   I Like It. | Report Abuse |   Link | Mar 12, 2017 5:57:49 PM Reply
Retail investors should get ofs in least price to encourage them towards investment .......
25. RPS   I Like It. | Report Abuse |   Link | Mar 12, 2017 5:52:57 PM Reply
It is really too late from 23rd feb to 12 march
24. Tarsem Gupta   I Like It. | Report Abuse |   Link | Mar 4, 2017 8:29:33 AM Reply
What is the status of allotment.It is too late
23. gk   I Like It. | Report Abuse |   Link | Mar 3, 2017 9:16:53 AM Reply
well it is trading at 1498 now,for those who feel having missed it
22. Sandeep   I Like It. | Report Abuse |   Link | Feb 27, 2017 8:44:01 AM Reply
Can any one share details on when is the allotment for BEL OFS?
21. pintu jain   I Like It. | Report Abuse |   Link | Feb 24, 2017 1:02:55 PM Reply
What rate final ofs
20. Irrational   I Like It. | Report Abuse |   Link | Feb 24, 2017 1:54:27 AM Reply
So relieved to see no allotment. I will try my luck in secondary market..
20.1. m.mahapatra   I Like It. | Report Abuse |   Link | Feb 24, 2017 9:58:49 AM
WHY? retail allocation is below yesterday''s closing price.
20.2. Irrational   I Like It. | Report Abuse |   Link | Feb 24, 2017 3:36:20 PM
I did not want to get at any price below yesterdays LTP. I will have ample opportunity to get it low. Cheers :)
19. Vikram   I Like It. | Report Abuse |   Link | Feb 23, 2017 9:26:16 PM Reply
Retail Cut-off = Rs 1558.00
Net cost to retail investors Rs 1480.10 (5% discount from 1558.00)

Non Reail Cut-off = Rs 1499

I don't understand why the cut-off is different for each category?

I applied it on cut-off price and feel bad about it now. I should have applied on lower price and better didn't get the allotment.
19.3. Irrational   I Like It. | Report Abuse |   Link | Feb 24, 2017 3:44:03 PM
Hi Vikram,

Yes your logic is correct and you should be happy to not get the allotment. In the past also this was the case like in MOIL(cutoff more in Retails than in Others). But if you want to buy MOIL on monday you will get it for less than the retail''s price (358).

Conclusion: Do not apply for any PSU OFS at 52 weeks high.
19.4. M C   I Like It. | Report Abuse |   Link | Feb 27, 2017 4:33:57 PM
Seems the logic is bad. The system should make one pass to determine the price and then another to allot in FCFS if the price is exceeded by the customer''s bid. Over-subscription cannot rule out FCFS.
18. Raj   I Like It. | Report Abuse |   Link | Feb 23, 2017 8:29:14 PM Reply
What is final cutoff price
17. Janix   I Like It. | Report Abuse |   Link | Feb 23, 2017 6:15:29 PM Reply
Debit to my account has been @ 1509.64
16. Srv   I Like It. | Report Abuse |   Link | Feb 23, 2017 5:08:01 PM Reply
Allotment price 1518
15. Srv   I Like It. | Report Abuse |   Link | Feb 23, 2017 5:01:22 PM Reply
Ofs price 1518
14. VikashGA   I Like It. | Report Abuse |   Link | Feb 23, 2017 4:29:02 PM Reply
Allotment price should be 1558.05
13. CV   I Like It. | Report Abuse |   Link | Feb 23, 2017 3:44:21 PM Reply
What''s the final price for retail?
13.1. Srv   I Like It. | Report Abuse |   Link | Feb 23, 2017 5:11:25 PM
Allotment price 1518
12. BIPIN   I Like It. | Report Abuse |   Link | Feb 23, 2017 2:55:06 PM Reply
OFS PRICE WELL BE 1550
12.1. CV   I Like It. | Report Abuse |   Link | Feb 23, 2017 3:45:32 PM
are you 100% sure?
11. MaK   I Like It. | Report Abuse |   Link | Feb 23, 2017 1:27:35 PM Reply
I Don''t know, why people are posting there questions? There is no one in this post who is answering.
A simple question to all the experts, what will be the Indicative price of this OFS of BEL?
simple and strait answer welcome.
11.1. bipin   I Like It. | Report Abuse |   Link | Feb 23, 2017 2:46:19 PM
ofs price well be 1550
10. SAMEER bhalla   I Like It. | Report Abuse |   Link | Feb 23, 2017 11:56:24 AM Reply
Pls tell should I apply at this price or not. I have already but shares at Rs 1100. Pls let us have your comments
9. YOGESHGOEL   I Like It. | Report Abuse |   Link | Feb 23, 2017 9:31:14 AM Reply
Dear Sir, as the floor price is 1498 & current market price is 1515. if I bid of 1498 & market price does not go below 1500, will I get shares
8. S GHOSH   I Like It. | Report Abuse |   Link | Feb 23, 2017 8:55:59 AM Reply
I HAVE APPLIED , WHEN WILL WE GET SHARES, IS THERE ANY LOCK IN PERIOD, IS IT ASBA, AND WHEN CAN WE TRADE THESE SHARES?
7. Dinesh Kumar Sharma   I Like It. | Report Abuse |   Link | Feb 23, 2017 7:57:41 AM Reply
How can I apply through Zerodha ?
6. Mitesh Popat   I Like It. | Report Abuse |   Link | Feb 23, 2017 7:44:12 AM Reply
How To apply
5. SUBRAHMANYAM   I Like It. | Report Abuse |   Link | Feb 22, 2017 6:53:30 PM Reply
can i apply thru sbi
5.1. Share View   I Like It. | Report Abuse |   Link | Feb 22, 2017 8:13:10 PM
No , Banks don''t provide such facilities
5.2. Sajeev   I Like It. | Report Abuse |   Link | Feb 23, 2017 6:11:06 AM
If you have trading and demat account with SBI, then yes you could apply though SBI. Its similar to how you apply in an IPO though SBI.
4. Super Trader   I Like It. | Report Abuse |   Link | Feb 22, 2017 10:03:43 AM Reply
Please comment,

1. BEL Shorted MAR@ 1528 (1 lot=450 qty) futures.
2. Apply in 3 accounts to get 450 qty @ 5% discount.

Now once OFS qty credited in my account , Square off all OFS and Futures.
3. Super Trader   I Like It. | Report Abuse |   Link | Feb 22, 2017 9:53:10 AM Reply
Septa and other respected analysts,
Please comment on my BEL strategy.

1. BEL Shorted MAR@ 1528 (1 lot=450 qty) futures.
2. Apply in 3 accounts to get 450 qty @ 5% discount.

Now once OFS qty credited in my account , Square off all OFS and Futures.

Thus gaining assured 5% return.
3.1. KRANTHI NAGAR   I Like It. | Report Abuse |   Link | Feb 23, 2017 12:09:38 PM
what if the cutoff price is 1600 and you get bel at 1520(5% discount)
2. Super Trader   I Like It. | Report Abuse |   Link | Feb 22, 2017 9:52:34 AM Reply
Please comment on my BEL ofs strategy.

1. BEL Shorted MAR@ 1528 (1 lot=450 qty) futures.
2. Apply in 3 accounts to get 450 qty @ 5% discount.

Now once OFS qty credited in my account , Square off all OFS and Futures.

Thus gaining assured 5% return.
2.1. Manish   I Like It. | Report Abuse |   Link | Feb 23, 2017 11:40:12 AM
At what price you bid as retail investor.
1. Sanjeev   I Like It. | Report Abuse |   Link | Feb 21, 2017 11:30:39 PM Reply
Must apply if you have cash ready in your account to make quick bucks.

Will there be the limit of Rs 2 lakhs for retail investors?
1.3. Vikram Singh   I Like It. | Report Abuse |   Link | Feb 22, 2017 5:12:02 PM
Yes Harish,

You can place as many bids as you at at what ever price you are comfortable with. If you are applying in retail quote to get 5% benifit, maximum amount should not exceed Rs 2 lakhs in total.

As a retail investor its recommended to apply at cutoff price only.

You can apply in this OFS through most online broker who offer online IPO''s

Hope this help.
1.4. Harish   I Like It. | Report Abuse |   Link | Feb 22, 2017 6:09:20 PM
Thank You Vikram
Thanks a lot...