The government will sell up to 15 per cent stake in Hindustan Aeronautics (HAL) through an offer for sale (OFS), which could fetch about Rs 5,000 crore to the exchequer. The floor price for the offer has been fixed at Rs 1,001 per equity share of the company. The price is at 15 per cent discount to Wednesday's closing price of Rs 1,177.75.
The OFS will take place on August 27-28 on a separate window of the stock exchanges, HAL said in a regulatory filing.
In an OFS, promoters of a company offload their stake in the company by selling their shares on an exchange platform.
The government proposes 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).
The government owns 89.97 per cent stake in state-owned Hindustan Aeronautics, which was listed on the stock exchanges in March 2018.
The company said in the regulatory filing that 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.
IDBI Capital Markets & Securities, SBICAP and YES Securities (India) will be acting as the settlement broker for the offer.
Ahead of the announcement, shares of HAL ended day's trade at Rs 1,177.75 apiece, up 0.5 per cent, against previous closing price of Rs 1,171.85 on the Bombay Stock Exchange.
By Chitranjan Kumar