Analysts Split on BHEL OFS: Retail Investors Eye Long-Term Gains
Analysts Split on BHEL OFS: Retail Investors Eye Long-Term Gains
Analysts weigh BHEL's ₹4,422 crore OFS, flagging valuation risks but recognizing an attractive order book for patient investors.
In Mumbai, analysts are divided over Bharat Heavy Electricals Ltd's ₹4,422 crore offer for sale (OFS), with caution on valuation but optimism about the company’s robust order book. The two-day sale includes a retail tranche, after the non-retail portion was subscribed 2.3 times on the first day. The floor price was set at ₹254 per share, and bids have already indicated strong demand on the non-retail side. This OFS is being viewed more as a divestment exercise than a near-term rerating catalyst, a point some analysts stress as investors weigh the upside against valuation concerns.
Vinod Nair, head of research at Geojit Investments, notes that the OFS could be attractive for retail investors with a long-term horizon, suggesting patience could pay off despite limited short-term upside. Divyam Mour, a research analyst at Samco Securities, echoes the sentiment that while the offer looks optically appealing, investors should consider execution realities and valuation before committing. On the broker side, JM Financial’s take on the floor price labeled the offer attractive, with a target price of ₹355 and a valuation of about 30 times FY28 estimated earnings, supporting a cautious but positive outlook for medium-term holders. The government plans to offload up to 5% of its stake, after which it would own about 58.17% of the company.
Market reaction has been swift, with BHEL shares sliding after the floor price was revealed. The stock traded around ₹260—roughly 8% below the Tuesday close of ₹276—reflecting the immediate impact of the pricing decision and a discount to the floor price. Investors are watching how the retail portion unfolds and whether the OFS can translate into meaningful value over a longer horizon. The blended signals from the market and analysts suggest a nuanced picture: potential value for long-term investors, but a need for disciplined participation given valuation and execution risks.
