NEW DELHI: Ruling out a public offering for BHEL, Heavy Industries Minister Praful Patel today said the government was considering 5 per cent stake sale in the power plantequipment maker to state-run financial institutions through the block deal route.

“As far as BHEL divestment is concerned we are not going to have any offering in the public… We may follow the pattern of ONGC and OIL India buying into Indian Oil. If that is possible, we may consider it,” Patel told PTI at a CII-ACMA event here.

“(We are looking at) block deal but to a PSU only which eventually could be bought back by BHEL at the appropriate time,” he said.

State financial institutions include LIC and PSU banks. Earlier in the day, he said that the momentum in power sector will help equipment manufacturers like BHEL.

The Department of Heavy Industries, which is the administrative ministry of the company, has for long opposed the proposed disinvestment in state-run BHEL, citing unfavourable market conditions.

In August 2011, the Cabinet had cleared selling government’s 5 per cent stake or over 12.23 crore shares in BHEL through follow-on public offer (FPO). The government holds a 67.72 per cent stake in the Navratna company.

However, market conditions led to a delay in the issue and the company in April 2012 withdrew the draft prospectus filed with market regulator Sebi.

For the July-September quarter, Bharat Heavy Electricals Ltd (BHEL) reported a 64 per cent fall in net profit at Rs 456 crore. It was the fifth straight quarterly drop in profit of the PSU mainly due to slowdown in sales.

The company’s order book stood at about Rs 1.02 lakh crore at the end of September 2013.

The government in July 2011 had appointed four merchant bankers — Morgan Stanley, DSP Merrill Lynch (Bank of America), ICICI Securities and Kotak Mahindra Capital— to manage BHEL’s follow-on public offer.

The government plans to garner Rs 40,000 crore through disinvestment in the current fiscal. So far it has managed to raise about Rs 3,000 crore through PSU stake sales.