The BEML stock rose on Tuesday after Narendra Modi-led Bharatiya Janata Party (BJP) looked set to dethrone Congress from power in Karnataka and clear the path for divestment of the Bengaluru-based public sector undertaking. Three days after Karnataka voted for a new assembly on May 12, the counting of votes cast in 222 assembly constituencies out of 224 began at 8 am today. BJP was leading on more than 100 seats compared with Congress ahead on 69 assembly seats in the state.
Reacting to the development, the BEML stock rose 9.24% or 97.45 points to 1151 level on BSE at 11:44 am. The stock opened at 1063 level and hit an intra day high of 1167 on BSE. The stock hit an intra day low of 1059 level.
On the NSE, the stock was trading 7.62% or 80.35 points higher at 1134 level.
The small cap stock is down 28.75% since the beginning of this year. It has lost 15.44% during the last one year. The stock had hit its 52 week low level of 971.45 on May 4, 2018.
It hit its 52-week high level of 1947.45 on September 19, 2017.
Later, the stock erased gains to close 1.07% or just 11 points higher at 1065 level after BJP fell short of the majority mark winning 104 seats of the total 222 assembly seats.During September-end last year, chief minister Siddaramaiah who also held the portfolio of state finance minister wrote to Prime Minister Narendra Modi seeking a review of the central government's decision to sell public sector rail coach and construction equipment maker.
"BEML with a freehold land of 2,696.63 acre and leasehold land of 1,494.93 acre is a very valuable PSU and cannot be sold to a private sector investor for the sake of achieving the disinvestment target," Siddaramaiah wrote in the letter to PM Narendra Modi.
The government holds 54.03% stake in the firm. It plans to sell 26% stake and cut it to 28% in the public sector firm.
Employees at BEML have also opposed any decision to sell the public sector unit into private hands.
The Modi government in October 2016 gave its in-principle approval to Niti Aayog's proposal for stake sale in more than a dozen state owned firms, including BEML.