Ashok Leyland Ltd, Bharat Forge Ltd, Tata Motors Ltd and Hyderabad-based Megha Engineering and Infrastructure Ltd (MEIL) are among potential bidders shortlisted to buy a 26% stake in state-run defence equipment maker BEML Ltd, said two people aware of the matter.

Others who made it to the shortlist could not be ascertained immediately.

These four companies among others had submitted expressions of interest (EoIs) to purchase the government’s stake in BEML. After selection, they have been issued the request for proposal (RFP) document and given access to BEML’s data room and production sites, said one of the two people cited above said, requesting anonymity.

BEML, the maker of military hardware such as the Prithvi missile launcher, operates in three major business segments—defence and aerospace, mining and construction, and rail and metro. It has nine plants across Bengaluru, Kolar Gold Fields, Mysuru, Palakkad and Chikkamagaluru.

SBI Capital Markets Ltd is the transaction adviser for BEML’s divestment plan. The shortlisted firms were earlier asked to disclose any business ties with either China or Pakistan due to the strategic nature of BEML’s operations.

“Bharat Forge, Tatas, Ashok Leyland and MEIL have been selected post EoI and are in the RFP stage. They have cleared the qualification criteria and are doing due diligence," said one of the two people cited above.

The government, which owns 54% in BEML, invited EoIs on 4 January to partly sell its stake in the company and also transfer management control. The department of investment and public asset (Dipam) had initially set 1 March as the deadline for submitting interests, but later extended it to 22 March.

A spokesperson for SBI Capital Markets declined comment.

A spokesperson for Ashok Leyland in an emailed response said, “As a policy, we do not comment on speculation." A spokesperson for TATA Motors in an emailed response said,

“We have no comments to offer on this at present. Do note that as a policy, we don’t comment on speculation."

Queries emailed to the spokespeople for the finance ministry, Dipam, Bharat Forge and MEIL on Sunday night remained unanswered.

Mint had earlier reported about companies such as TATA Motors and Ashok Leyland looking to seek control of BEML as part of their strategy to grow their defence manufacturing businesses and cut dependence on the core commercial vehicle business, which is cyclical in nature.

“We want to extract the maximum value (from the stake sale)," a senior government official said, requesting anonymity.

The government seeks to raise ₹1.75 trillion from asset sales in FY22, sharply higher than the ₹32,845 crore raised through disinvestments of state-run firms in FY21, when India, along with other nations, was hit by the coronavirus pandemic. The government’s ambitious strategic disinvestment program has gained traction with ArcelorMittal, the world’s largest steel company; Sajjan Jindal-led JSW Steel; MEIL and Tata Steel among shortlisted bidders for Neelachal lspat Nigam Ltd.

The other big-ticket privatization plans are for Air India and Bharat Petroleum Corporation Ltd.

Disinvestment receipts, which touched ₹1 trillion in 2017-18, declined to ₹84,972 crore in 2018-19 and further to ₹50,299 crore in 2019-20.