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Photo: Reuters
Photo: Reuters

Govt seeks bids from merchant bankers for advice on HAL share sale

  • At the current market price of 820 apiece, the share sale will fetch the government a little over 4,072 crore
  • The company reported a net profit of 2,282 crore in fiscal 2018-19

NEW DELHI : The government has invited merchant bankers to advise it on the divestment of state-run Hindustan Aeronautics Ltd (HAL).

The Department of Investment and Public Asset Management (DIPAM) on Thursday issued a Request for Proposal (RFP) for appointing merchant bankers and brokers for disinvestment of 15% paid up equity capital in state-run Hindustan Aeronautics Ltd (HAL) through an offer for sale (OFS).

According to the RFP, the authorised share capital of the 55-year old company is Rs600 crore and the paid up equity capital is Rs334.39 crore as of 31 March, 2019. The government holds 89.97% of equity in HAL. The face value of each equity share is Rs10.

At the current market price of 820 apiece, the share sale will fetch the government a little over Rs4,072 crore. In the current fiscal so far, the government has garnered 18,094.59 crore through disinvestment transactions compared to an ambitious target of Rs1.05 trillion rupees.

The company reported a net profit of Rs2,282 crore in fiscal 2018-19.

“The government is also considering allotting shares to eligible and willing employees of HAL at a discount to the Issue/ discovered price (lowest cut off price) up to a maximum of certain percentage of the OFS size subsequent to completion of the transaction under OFS. The percentage and extent shall be decided in due course," it said.

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