State-owned Bharat Heavy Electricals Ltd has dropped all its existing overseas acquisition plans, citing bureaucratic hurdles it faces on account of being a public sector company. There are a host of procedures that it needs to follow which is not the case with private firms. For everything, it needs to float a tender. Even if it wants to make an acquisition through a private firm, it needs to float a tender to find a strategic partner.
Some of Bhel’s plans abroad included the acquisition of Czech power company Skoda Power AS’ turbine manufacturing facility and units for manufacturing boilers and railway coaches, among others. In such acquisitions, the time limit is short and there is a need for quick decision-making, something which BHEL does not have. Then there is problem of setting up companies for tax-saving purpose and to incorporate different companies.
Bhel has a robust balance sheet and Rs 10,000 crore cash surplus. Economic downturn worldwide has opened up a host of opportunities for acquisitions overseas, but BHEL is unable to cash in on the available opportunities. These limitations will hurt it’s prospects going forward.
Public sector units have lost out to their private sector rivals in their bid to acquire resources or assets overseas partly due to procedures that are at times lengthy and time-consuming. A case in point is NTPC Ltd,
| Company Name | CMP |
|---|---|
| BHEL | 284.65 |
| Thermax | 3645.00 |
| Kirloskar Oil Eng | 1473.25 |
| Skipper | 384.90 |
| GMM Pfaudler | 911.75 |
| View more.. | |
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