HAL to raise ₹4,200 cr through IPO

Our Bureau Mumbai | Updated on March 14, 2018 Published on March 13, 2018

(from left) M Mazhar Ali, ED, Hindustan Aeronautics, with VM Chamola, Officiating Chairman & MD, and CV Ramana Rao, Director — Finance & CFO, at a press conference to announce the company’s IPO in Mumbai on March 13   -  PAUL Noronha

Issue opens on March 16; govt to divest 10.2%; price band set at ₹1,215-1,240/share

Government-sponsored Hindustan Aeronautics (HAL) is aspiring to raise ₹4,200 crore from its initial public offering that opens for subscription on March 16. The aerospace company is engaged in design, development, manufacturing and other services of aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures.

The IPO is an an offer-for-sale, where the company will not receive any money from the issue. It is a part of the government's 2017-18 divestment programme for which the target had been revised to ₹80,000 crore from ₹72,500 crore stated earlier in the Union Budget.

The government will offer over 3.41 crore equity shares through the issue, and over 6.68 lakh shares will be reserved for subscription by employees. The government will dilute 10.2 per cent of its stake in the company. The IPO closes on March 20.

Reportedly, the price band for the issue is fixed at ₹1,215-1,240 a share and retail investors will get shares at a discount of ₹25 a share.

Govt denies JV news

The key attraction for the IPO would have been a joint venture between French firm Dassault Aviation and HAL for 126 Rafale fighter jets that India is purchasing from France. But the government on Tuesday dismissed such talks. Minister of State for Defence Subhash Bhamre, in a written reply to the Rajya Sabha, said, “Due to the inability of the government to conclude negotiations and sign the contract, there was no such agreement between Dassault Aviation and Hindustan Aeronautics or any other public sector undertaking (PSU).”

HAL’s operations are organised into five complexes, namely the Bengaluru complex, MiG complex, Helicopter complex, Accessories complex, and Design complex, which together include 20 production divisions and 11 research and design centres located across India.

As of December 31, 2017, its order book was ₹68,461 crore, which generally includes products and services to be manufactured and delivered and excludes anticipated revenues from joint ventures and subsidiaries.

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Published on March 13, 2018
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