The long-delayed initial public offer (IPO) of defence PSU Hindustan Aeronautics Limited (HAL) is set to materialise soon, with the company filing the draft red herrring prospectus with market regulator Sebi on Friday. HAL through its IPO is likely to offload some 3.615 crore equity shares of face value Rs 10 each representing 10 per cent of its paid-up equity capital.
The Centre had approved the IPO as early as in 2012. According to CMD, T Suvarna Raju, “This is a major milestone towards listing of the defence PSU which is slated for partial disinvestment by the government.”
In 2012, the government had appointed four merchant bankers — Axis Capital, Karvy Computershare, Goldman Sachs (India) Securities and SBI Capital Markets — for managing the stake sale.
In 2015, as part of its disinvestment programme, the Maharatna firm had announced restricting of its board for this purpose. The government expects to mop up nearly $2 billion from the sale of its stake in the DPSU. Former HAL chairman RK Tyagi had said, “This is an excellent move and will now help the organisation which is 75 years-old in increased transparency and better corporate governance.”
Tyagi said, “With disinvestments, the companies actually improve and so does their market value. Basically, the major share of the company remains with the government. Maybe the government at some later stage might decide to disinvest more.”