Hindustan Aeronautics (HAL) share price fell in early trade today after the state-owned firm said government would sell up to 15 per cent stake through an offer for sale (OFS). The stake sale could fetch about Rs 5,000 crore to the exchequer.
The share sale will be part of the Narendra Modi government's ambitious Rs 2.1 lakh crore disinvestment target for fiscal 2020-21.
In one year, HAL share has risen 81% and grown 61% since the beginning of this year. The stock has gained 32.44% in a month.
The government plans to sell 3,34,38,750 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).
Govt to sell up to 15% stake in Hindustan Aeronautics
Currently, government owns 89.97 per cent stake in Hindustan Aeronautics. The firm was listed on stock exchanges in March 2018. 20 per cent of the offer 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 firm said.
Through the OFS route, a listed company can sell its shares via exchange platform itself. In an OFS, a minimum of 25% of shares offered are reserved for institutional investors such as mutual funds and insurance companies.
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By Aseem Thapliyal