India has planned to sell a 15% stake in the state-owned aerospace and defense manufacturer Hindustan Aeronautics Limited (HAL) to raise funds worth about INR 5,000 crore, through an OFS (offer for sale).
The base price of the share was set at INR 1,001 per share, and OFS took place on 27-28 August in separate windows, reported HAL.
According to the Economic Times, the government proposes to sell 3,34,38,750 equity shares through OFS, constituting a 10 percent paid-up share capital of the company, with an option to sell an additional 5 percent stake or 1,67,19,375 equity shares (oversubscription option), HAL said in a regulatory filing.
The Government of India holds 89.97% stake in the company, which was listed in March 2018. The new OFS will provide shares at a 15% discount from Wednesday’s closing price of Rs. 1,177.75.
As per the sources, 20% of the offered size would be reserved for retail investors and would be allocated offer shares at a discount of 5% to the cut-off price in accordance with the OFS guidelines.
HAL’s industry machine has been seeing constant orders and generation of revenues, despite the COVID-19 pandemic. Its strong results for the year have been attributed to the constant development and trials of the products, along with a surge in the indigenisation drive of the armed forces and the government.
Its main customers being the defense sector, much of its orders have had a negligible impact of the pandemic. The company looks forward to new orders for its Light Combat helicopter and the LCA Tejas Mk-1A, the upgraded variant of the LCA Mk-1 by the year-end.
According to the filings, HAL’s total revenue in 2019/20 was INR214.4 billion (USD2.8 billion) and its net profit was INR28.3 billion. These figures represent year-on-year increases of 7.1% and 20.7% respectively. The value of HAL’s assets at the end of the fiscal year was INR532 billion, reported Janes.
A 10% stake was also sold as Initial Public Offering (IPO) in 2018 when the company was listed. The share price slumped to INR 1,006.00 by 1307 hours on August 28, 2020.