Govt proposes to sell up to 3.5% stake in HAL to raise over ₹2,867 cr
2 min read 22 Mar 2023, 05:53 PM ISTThe Indian government has proposed to sell up to 3.5 per cent stake in HAL
PremiumIndia will be selling up to 3.5% stake in its aerospace and defence company, Hindustan Aeronautics (HAL) through an offer for sale (OFS). The offer will open on March 23 and will continue till March 24th. The 3.5% stake sale comprised 1.75% as the base offer and 1.75% as an additional option. The government seeks to raise more than ₹2,867 crore through this transaction.
As per the regulatory filing, the Indian government proposes to sell up to 58,51,782 equity shares or 1.75% as a base offer through OFS in HAL. The face value of equity shares is ₹10 each of the company.
Further, the Centre has the oversubscription option to sell another 1.75% or 58,51,781 equity shares in HAL.
Taking into consideration the base size and oversubscription option, the Centre plans to offload 11,703,563 equity shares or 3.5% in HAL.
The floor price of the OFS is set at ₹2,450 per equity share --- which is at a 6.67% discount from the current market price of HAL on BSE.
In value terms, the government is planning to raise ₹2,867.37 crore from this stake sale.
On Wednesday, HAL's share price closed at ₹2,625.20 apiece down by nearly a percent.
Furthermore, OFS will be conducted on BSE and NSE. On exchanges, the OFS will take place on a separate window.
On March 23rd, the first day of the OFS will be available for non-retail investors for bidding in HAL. These non-retail investors have the option to willingly carry forward their unallotted bids for allocation to them in the unsubscribed portion of the retail category.
That being said, on March 24th, the retail category will be allowed to bid. Also, those non-retail investors who chose to carry forward their unallotted bids can bid on this day.
10% of the offered size will be reserved for retail investors. The stock exchanges will decide the number of shares eligible to be considered for the retail category based on the floor price.
Retail investors are those individuals who place their bids for shares of a total value not exceeding ₹2 lakh on exchanges. However, no discount is offered for this category.
Notably, no single bidder other than mutual funds and insurance companies will be allocated more than 25% of the offered shares.
Further, under the OFS, any unsubscribed portion of the Retail Category, after allotment, shall be eligible for allocation in the Non-Retail Category in respect of their un-allotted bids on T Day who choose to carry forward their bid to T+1 Day.
Also, 5% of the total size may be offered to eligible and willing employees of HAL at the cut-off price in the retail category. The employees' category is also eligible to apply up to ₹2 lakh worth of shares.
Companies like IDBI Capital Markets & Securities, SBICAP Securities, and Yes Securities are the brokers for the OFS.
