Ashish Ranjan
Govt to sell up to 3.5% stake in HAL: The Indian government intends to sell up to a 3.5% stake in aerospace and defence company Hindustan Aeronautics Ltd, according to a Wednesday filing with the stock exchange. Based on a minimum price of Rs 2,450 per share, the stake transaction would be worth Rs 2,867 billion. The floor price is less than the current closing price of RS 2625.20.
The government possesses a 75.15 percent stake in the public sector aerospace and defence company, as indicated by the shareholding structure. The company’s current market capitalization is Rs 87,800 crore. In accordance with Securities and Exchange Board of India listing requirements, the company is undertaking the offer for sale in order to achieve the minimum public shareholding required for listing.
As part of its disinvestment program, the government sold a 15% stake in Hindustan Aeronautics (HAL) in 2020, and investors responded positively to the Rs 5,000 crore offer for sale (OFS).
According to the filing with the stock exchange, the government intends to sell 1.75 percent of its equity shares on March 23 and 24 and an additional 1.75 percent stake if the oversubscription option is exercised.
Subject to the receipt of valid offers, 10% of the offer size shall be reserved for retail investors. Individual investors who submit bids for shares with a total value of less than Rs 2,000,000 are considered retail investors. The sale of state-owned companies is a crucial revenue-raising strategy that enables the government to invest in infrastructure development.
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To date, the government has collected Rs 31,100 crore by selling its shares in state-owned companies, surpassing its goal of Rs 500 crore for the fiscal year ending on March 31. The Indian government risks falling short of its divestment target for 2022/23 as it intends to delay the partial sale of its stake in Hindustan Zinc (HZL) unless the company cancels its nearly $3 billion cash acquisition of two Vedanta Group subsidiaries.
