Govt Plans To Sell 3.5% Stake Of Hindustan Aeronautics Via OFS

The Indian government intends to sell up to 3.5 per cent of its stake in Hindustan Aeronautics, an aerospace and defence business, according to an exchange filing on Wednesday.

Based on a minimum price of Rs 2,450 per share, the stake sale would be worth Rs 2,867 crore. The floor price is lower than the current ending price of RS 2625.20.

The government owns 75.15 per cent of the public sector aerospace and defence business, according to the shareholding pattern. The company's present market capitalisation is Rs 87,800 crore. The offer for sale is being made to meet the company's minimum public shareholding requirement under the Securities and Exchange Board of India's listing obligations, according to the company.

As part of its disinvestment program, the government sold a 15 per cent stake in Hindustan Aeronautics (HAL) in 2020, and the Rs 5,000 crore offer for sale (OFS) got a strong response from investors.

According to the stock exchange filing, the government intends to sell 1.75 per cent of its equity shares on 23 and 24 March, as well as another 1.75 per cent stake if the oversubscription option is taken.

Retail investors will receive 10 per cent of the offered size if legitimate bids are received. Individual investors who make bids for shares worth less than Rs 20,000 are referred to as retail investors. Investment in state-owned enterprises is a crucial revenue-raising measure that allows the government to spend on infrastructure development.

So far, the government has raised Rs 31,100 crore by selling its stakes in state-owned enterprises, compared to its goal of Rs 500 crore for the fiscal year ending 31 March. The Indian government is on the verge of missing its divestment goal for 2022-23, as it plans to postpone the sale of a portion of its share in Hindustan Zinc (HZL) unless the company cancels the nearly USD 3 billion cash purchase of two Vedanta Group subsidiaries.