Hindustan Aeronautics (HAL) announced its long-awaited initial public offering (IPO) of shares worth Rs 4,229 crore, leading to divestment of 10 per cent Government of India stake in the 100 per cent government-owned defence air craft manufacturer, developer and service provider.
The IPO price band has been fixed at Rs 1,215 to Rs 1,240 per equity shares of face value of Rs 10 each.
The public offer opens on March 16 and closes on March 20.
A market leader in the defence business, HAL is a Navratna company and was ranked 39th largest aerospace company in the world in revenue terms in 2016. As of December 31, 2017, HAL’s, order book was at Rs 68,461 crore.
According to the red herring prospectus, for the six-month period ended September 30, 2017, HAL’s revenue from operations was at Rs 5,172.5 crore, Ebitda at Rs 868.3 crore and profit before tax at Rs 609.6 crore.
After manufacturing aircraft of Russian and Western origin, HAL is on the job of indigenous design and manufacture of aircraft and helicopters for both military and civil use.
HAL’s indigenous light combat aircraft (LCA), also known as Tejas, a multi-role supersonic fighter, was accepted by the Indian Air Force. Two LCA Tejas were inducted by the IAF in March-April 2016.
HAL has also developed indigenous advanced light helicopter (ALH) Dhruv, a new generation multi-role, multi-mission, all weather helicopter in the 5.5 tonne weight category.
In FY17, HAL’s sales to the defence services accounted for 91.4 per cent of its sales, and it exported products and services, primarily spares, to more than 13 countries.
In the IPO, at the upper price band, the government will raise Rs 4,229.33 crore through an offering of 34,107,525 equity shares. Proceeds from the offer for sale will go the government and the company will not receive any proceeds.
A discount of Rs 25 on offer price is being offered to retail individual bidders and to employees.
Of the net shares on offer to the public 50 per cent will be allocated to QIBs, 35 per cent to retail bidders and 15 per cent to HNIs.
The book running lead managers to the public offer are SBI Capital Markets and Axis Capital.