The government will sell up to 15 per cent stake in state-run aerospace and defence company Hindustan Aeronautics (HAL) through an offer for sale (OFS), at a floor price of Rs 1,001 per share. The offer could fetch the exchequer around Rs 5,020 crore.
Through the OFS, the government proposes to sell 3,34,38,750 equity shares, constituting 10 per cent paid-up share capital of the company, with an option to sell an additional 5 per cent stake or 1,67,19,375 equity shares (oversubscription option), HAL said in a regulatory filing.
The offer price is at 15 per cent discount to Wednesday’s closing price of Rs Rs 1,177.75, and the OFS will take place on August 27-28 on a separate window of the stock exchanges.
A total of 20 per cent of the offer size will be reserved for retail investors, and they will be allocated offer shares at a discount of 5 per cent to the cut-off price in accordance with the OFS guidelines.
The government owns 89.97 per cent stake in the company, which was listed in March 2018.
IDBI Capital Markets & Securities, SBICAP Securities and YES Securities (India) will be acting as the seller’s broker for the offer. Of these, IDBI Capital Markets will be acting as the settlement broker.
Ahead of the announcement, HAL shares closed 0.5 per cent higher at Rs 1,177.75 on the BSE, while benchmark Sensex climbed 0.6 per cent to 39,074 points. The stock has gained more than 29 per cent over the last one month, and is up 61 per cent for the year to date.
For the fiscal year 2020-21, the government has set a disinvestment target of Rs 2.10 lakh crore. Of this, Rs 1.20 lakh crore will come from disinvestment of public sector undertakings and another Rs 90,000 crore from stake sale in financial institutions.
Last month, Finance Minister Nirmala Sitharaman had said the government is working on completing the stake sale process of about 23 public sector companies whose divestment has already been cleared by the Cabinet.