The Indian government has approved a 10% stake sale in state-run Hindustan Aeronautics Limited (HAL), a 77-year-old company headquartered in South India, through an initial public offering.
HAL had filed a draft proposal with the Securities and Exchange Board of India on September 29 for an initial share sale, as the government finally decided to take the state-owned aerospace and defence firm public after moving back and forth on its plans for five years.
It comprises a sale of 36.15 million shares in the government’s stake, which currently stands at 99.99%, according to the draft red herring prospectus (DRHP).
HAL Chairman T Suvarna Raju termed the filing of the DRPH a major milestone in the process of a partial stake sale, but did not comment on what it means for the firm. Former HAL chairman RK Tyagi, who was holding the position when the stake sale was cleared by the HAL Board in October 2014, called it a positive move as it will bring in more transparency and accountability.
HAL will get three years from its listing date to meet SEBI norms of at least 25% public shareholding.
HAL has been the sole player in the country building fighter aircraft such as Sukhoi-30-MkI and the Hawk advanced jet trainers under licenced production and helicopters such as Dhruv advanced light helicopter, designed in-house. It is also the designated agency to produce Tejas, the homegrown light combat aircraft for the air force.