State-run Hindustan Aeronautics Limited (HAL) will open its Initial Public Offer (IPO) worth Rs 4,200 crore on March 16. The subscription will close on March 20 and the government is going to divest 10 percent of its shares.
HAL had initiated the process of IPO in 2017 by filing the draft red-herring prospectus (DRHP) with SEBI. For managing the sale of stakes, the Union government had appointed four merchant bankers — SBI Cap, Goldman Sachs, Barclays and Axis Capital in 2013.
The company, which is into aircraft manufacturing for the armed forced, will not receive any proceeds from the IPO, and all the proceeds will go to the selling shareholder.
By entering the primary market, the company aims to avail the benefits of listing the equity shares in the stock exchanges. HAL aims to carry out the disinvestment of 36,150,000 equity shares by the selling shareholder (the president of India).
The face value of the share is fixed at Rs 10 per share, and the issue price band will be Rs 1,215 to Rs 1,240 per share.
The Bengaluru-based Defence Public Sector Undertakings (DPSU) Company was incorporated in 1963. In July 2007, HAL had received the "Navratna" status. HAL is the 39th largest aerospace company in the world in terms of revenue.
Like HAL, government-run Bharat Dynamics and Indian Renewable Energy Development Agency (IREDA) are also gearing up for IPO. The two firms had received market regulator SEBI's approval for going public on February 24.