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The Indian government is planning to sell up to 3.5% stake in aerospace and defence company Hindustan Aeronautics Ltd, according to an exchange filing on Wednesday. The stake sale would be valued at Rs 2,867 crore, based on a floor price of Rs 2,450 apiece. The floor price is at a discount to its today’s closing price of RS 2625.20.
According to the shareholding pattern, the government holds 75.15% stake in the public sector aerospace and defence company. The current market cap of the company stands at Rs 87,800 crore. The offer for sale is being undertaken for achieving the minimum public shareholding of the company in accordance with Securities and Exchange Board of India’s listing obligations, the company said.
In 2020, the government had sold 15% stake sale in Hindustan Aeronautics (HAL) as part of its disinvestment programme and the Rs 5,000 crore offer for sale (OFS) had received a strong response from investors.
According to the stock exchange filing, the government has proposed to sell 1.75% of its equity shares on March 23 and March 24 and and additional 1.75% stake in the event the oversubscription option is exercised.
10% of the offer size shall be reserved for retail investors subject to the receipt of valid bids. Retail investors mean an individual investor who places bids for shares of total value of not more than Rs 2,00,000. Divestments in state-owned firms is a key revenue-raising measure that helps government to spend on infrastructure-building.
So far, the government has mopped up Rs 31,100 crore by selling its shares in state-run firms as against its target of Rs 500 crore for the financial year ending March 31. The Indian government stares at missing its divestment target for 2022/23 as it plans to put on hold the part sale of its stake in Hindustan Zinc (HZL) unless the company calls off the nearly $3 billion cash acquisition of two Vedanta Group subsidiaries. (With Agency Inputs)
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