HAL share price today plunges as govt to sell stake, launches OFS

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As the government announced an offer for sale (OFS) to sell a 3.5% stake in Hindustan Aeronautics Ltd. at a floor price of Rs. 2,450 per share, shares of HAL fell more than 5% to Rs. 2,475 per share on the BSE.

The government announced on Wednesday that it intends to sell up to 3.5% of the aerospace and defence industry in this next week in a deal that could net it $2,867 billion. The HAL stake sale has a floor price of 2,450 per share, which is less than Wednesday’s close.

On March 23–24, the government intends to sell a 1.75% interest, with the option to sell an additional 1.75% if necessary. Institutional investors and retail buyers can begin the two-day Offer for Sale (OFS) on Thursday and Friday, respectively. HAL is a Central Public Sector Enterprise (CPSE) under the Defence Ministry, and the government owns a 75.15% share in it.

The base issue size for the OFS is 1.75%, or 58.51 lakh shares, with the option to retain an equal amount of over-subscription. According to HAL’s regulatory filing, the equity shares comprising the base offer size plus the oversubscription option will constitute 3.50 percent (1,17,03,563) of the company’s equity shares in the event that the oversubscription option is exercised.

The government has collected $31,106.6 crore so far via share buybacks and disinvestments in CPSEs. In contrast to the budget objective of $65,000 crore, the government has set a lower revised estimate of disinvestment revenue forecasts for the current fiscal at 50,000 crores last month.

State-owned Hindustan Aeronautics Limited announced a net profit of Rs. 1,155 crore for the three months ending December 2022, up 24% from the same period last year as compared to Rs. However, its operational revenue decreased to 5,665 crore from 5,894 crore in the similar period of last year.