Govt to sell up to 3.5% stake in HAL

23 Mar 2023 , 09:28 AM

According to a filing made on Wednesday with the stock exchange, the Indian government intends to sell up to 3.5% of its ownership in the aerospace and defence firm Hindustan Aeronautics Ltd. Based on a floor price of Rs 2,450 per share, the sale’s worth would be Rs 2,867 crore or more. 

In comparison to its RS 2625.20 closing price today, the floor price is less than that amount. 

The government owns 75.15% of the publicly traded aerospace and defence business, per the shareholding pattern. The company’s current market value is Rs87,800 crore. According to the Securities and Exchange Board of India’s listing requirements, the firm is making the offer for sale in order to reach the minimum public shareholding requirement.

As part of its disinvestment agenda in 2020, the government sold a 15% interest in Hindustan Aeronautics (HAL), and investors responded favourably to the Rs5,000 crore offer for sale (OFS).

The government has proposed to sell 1.75% of its equity shares on March 23 and 24, as well as an extra 1.75% stake in the case that the oversubscription option is exercised, according to the stock exchange filing.

Retail investors will be entitled to 10% of the total offer amount, pending the submission of legally binding bids. Retail investors are defined as an individual who makes bids on shares with a maximum bid of Rs 20,00,000. Investing less in state-owned companies is a crucial way for the government to raise money to invest in infrastructure.

In contrast to its goal of Rs 500 crore for the fiscal year ending March 31, the government has so far raised Rs 31,100 crore by selling its stakes in state-run businesses