Government to sell up to 15% stake in Hindustan Aeronautics

Union Government has decided to offload/ sell up to 15 per cent stake in Hindustan Aeronautics (HAL) through an offer for sale (OFS). This sale would fetch around Rs 5,000 crore to the exchequer.

The floor price for the offer has been fixed at Rs 1,001 per equity shares of the company, which is at a 15 per cent discount to Wednesday's closing price of Rs 1,177.75.

HAL in a regulatory filing has said, the OFS will take place on August 27-28, 2020, on a separate window on the stock exchanges. The stake sales will be open for non-retail investors today, i.e. August 27, 2020, and for non-retail investors tomorrow, i.e. August 28, 2020.

It also said, 20 per cent of the offered size will be reserved for retail investors and 25 per cent for mutual funds. Retail investors will be allocated offer shares at a discount of 5 per cent to the cut-off price in accordance with the OFS guidelines.

The government proposes to sell 3,38,750 equity shares, constituting 10 per cent paid-up share capital of the company, with an option to sell an additional 5 per cent stake or 1,67,19,375 equity shares (oversubscription option).

The government owns 89.97 per cent stake in state-owned Hindustan Aeronautics, which was listed on the stock exchanges in March 2018.

IDBI Capital Markets & Securities, SBICAP and YES Securities (India) will be acting as the settlement broker for the offer. Of these, IDBI Capital will be acting as the settlement broker.

What is an Offer for Sale?

Offer for sale is a process in which the promoters of a company offload its stake in the company by selling their shares on an exchange platform.