Hindustan Aeronautics listing: Stock makes tepid debut, lists at 5% discount

State-owned Hindustan Aeronautics made a lacklustre debut on BSE and NSE today. The HAL offer was subscribed 99 percent during its IPO on March 16-20, 2018. The stock listed at 5% percent discount on bourses. HAL began trading at 1169 on BSE, 5 percent lower to its issue price of Rs 1240 per share. The stock which opened at Rs 1,169 fell to an intra day low of 1150 and a high of 1184 level. At 10:34 am, the stock was trading at 1175 level down 3.23% or 39.25 points than its issue price.

The market capitalisation of HAL stock stood at Rs 39,290 crore. The Rs 4,229-crore initial public offer of state-owned Hindustan Aeronautics was subscribed 99 percent during March 16-20, 2018, supported by qualified institutional buyers (QIBs).

The IPO managed to sail through on the last day of the offer after state-owned LIC came to the rescue by putting in bids worth Rs 3,000 crore. The IPO was subscribed nearly 50% on the third day till LIC pumped in funds at the end of the offer. The state-owned firm's IPO was of 34,107,525 shares.

SBI Capital Markets and Axis Capital managed HALs initial share sale offer. The Rs 4,230-crore initial public offer of state-owned Hindustan Aeronautics Ltd (HAL) managed to sail through on the final day yesterday, thanks to state insurer LIC coming to its rescue. According to reports, LIC's Rs 3,000 crore bid on the last day saved the day for the defence firm's 10.20 per cent stake sale.

The IPO was subscribed nearly 50% on the third day till LIC pumped in funds at the end of the offer. Analysts said high price of the issue amid volatile market conditions was a concern after the Narendra Modi government presented its last full-fledged Budget before the 2019 polls on February 1.

The IPO was subscribed 0.99 times or 99 percent on third day with demand mainly coming from qualified institutional buyers segment. The category reserved for qualified institutional buyers (QIBs) was subscribed 1.7 times and retail investors 0.4 times. The retail investors were given a discount of Rs 25 per share.

The firm received bids for 3.31 crore shares against the total issue size of 3. 41 crore shares, data showed on the third day of the offer.

Interestingly, foreign institutional investors did not bid for the IPO.

The Navratna company clocked a profit of Rs 3,580 crore in fiscal 2017 on a revenue of over Rs 18,600 crore. HAL has an order book of over Rs 68,000 crore, which covers the next three years. The issue was managed by SBI Caps and Axis Capital.

The IPO was subscribed 24 per cent on the first day of bidding.  On the second day, the initial public offer was subscribed 45 per cent.

Bengaluru-based HAL is primarily involved in the operations of the aerospace industry. These include manufacturing and assembly of aircraft, navigation and related communication equipment and airports operation.

HAL designs, develops, manufactures, sells, repairs, and overhauls aircraft and related systems in India.

It offers helicopters and power plants; aerospace structures, tanks, and cryogenic engines; and materials, including castings, general forgings, precision forgings, powder metallurgy products, rubber products, composites, and rolled rings. The company also exports its products. It serves space, defence, and civil markets.