Analysts divided over BHEL's OFS for retail investors

Analysts are presenting mixed reviews regarding the participation of retail investors in Bharat Heavy Electricals Limited's (BHEL) ₹4,422 crore offer for sale (OFS). While some experts express caution over the company's current valuation, others highlight the potential for long-term gains due to an optimistic order book. The retail portion of the OFS will be open for bids following a strong response from non-retail investors, who subscribed 2.3 times the available shares, prompting the activation of the green shoe option. On Wednesday, BHEL's stock experienced a 5.6% decline, closing at ₹260, with a floor price set at ₹254, offering an approximate 8% discount. Despite this dip, some brokerages believe that the valuation represents an attractive entry point for medium to long-term investors. JM Financial maintains a buy rating with a target price of ₹355, citing improved order inflow and a healthy book-to-bill ratio of 7.2 times. Conversely, analysts like Divyam Mour from Samco Securities caution that the OFS is primarily a divestment exercise rather than a re-rating catalyst. Overall, while BHEL's shares have appreciated over 30% in the past year, experts advise a careful approach for short-term investors, with a recommendation for staggered participation for those looking at a longer investment horizon.