- 23 Mar 2023
- ICICIdirect Research
GOVERNMENT TO SELL UP TO 3.5% STAKE IN HAL VIA OFS
HAL - 4851 Change: -165.00 (-3.29 %)News: The government will sell up to 3.5% stake in Hindustan Aeronautics (HAL) through an offer for sale (OFS) on March 23-24. The government has proposed to sell 1.75% on March 23 for non-retail investors only and on March 24 for retail investors and non-retail investors who choose to carry forward their un-allotted bids with an option to sell additional 1.75% in case of oversubscription. Also, 10% of the offer size shall be reserved for retail investors. The floor price for the OFS has been fixed at Rs 2,450 per share, a 6.6% discount to Wednesday’s closing price
Views: The OFS was expected in HAL to meet the minimum public shareholding of 25% as the government stake was 75.15%. In case of 3.5% stake sale, the government will raise Rs 2867 crore and its stake will come down to 71.65%. Our long-term view on HAL is positive as we believe the company is well placed to benefit significantly from the future requirements of combat aircraft, helicopters and Unmanned aerial vehicles from armed forces. The order backlog is already strong at ~Rs 91000 crore (3.5x TTM revenues)
Impact: Neutral