Centre to sell up to 3.5% stake in Hindustan Aeronautics Ltd via offer for sale

The Centre is planning to sell up to 3.5 per cent stake in aerospace and defence PSU firm Hindustan Aeronautics Ltd (HAL) through an offer for sale (OFS), it said in a regulatory filing on Wednesday. The floor price for the OFS has been fixed at Rs 2,450 per share, a 6.6 per cent discount as against its closing price on Wednesday. The stake sale would be valued at Rs 2,867 crore, based on a floor price of Rs 2,450 apiece, which is a discount from its current share price.

The company in its regulatory filing said: "The government proposes to sell up to 1.75 per cent (58,51,782) equity shares of the face value of Rs 10 each of the company, on March 23 (for non-retail Investors only) and on March 24 (for retail investors and non-retail investors who choose to carry forward their un-allotted bids with an option to additionally sell 1.75 per cent (58,51,781) equity shares."

The offer shall take place on a separate window of the Stock Exchanges (BSE and NSE) on March 23, 2023 ('T' day) and March 24, 2023 ('T+1' day), from 9:15 am to 3:30 pm on both days.

About 10 per cent of the offer size is reserved for retail investors subject to the receipt of valid bids. The stock exchanges will decide the number of shares eligible to be considered in the retail category based on the floor price.

Non-retail investors can place their bids only on the T-day. The non-retail investors, while placing their bids, can flag their willingness to carry forward their un-allotted bids to T+1 day for allocation to them in the unsubscribed portion of the Retail Category, the regulatory note said.

Non-retail investors, who have placed their bids on T-day and have chosen to carry forward their un-allotted bids to T+1 day, will be allowed to revise their bids upward on T+1 day, as per the OFS Guidelines.

According to Refinitiv Eikon, the Centre has a 75.15 per cent stake in the company, which was listed in March 2018. Its current market stands at Rs 87,800 crore. The shares of HAL on March 22 closed 1.02 per cent lower at Rs 2,623 apiece on BSE.

On settlement matters, the company said settlement shall take place on a trade-for-trade basis. For bids received from non-Retail Category on March 23 (T-Day), non-institutional investors and institutional investors who place orders with 100 per cent of the order value deposited upfront, settlement shall take place on a T+1 Day, in accordance with the OFS Guidelines.

Institutional investors who place bids without depositing 100 per cent of the order value upfront, settlement shall be as per the existing rules for secondary market transactions (i.e., on T+1 Day).

For the bids received on T+1 Day, from the Retail Category and from the un-allotted institutional investors who choose to carry forward their bid to T+1 Day without depositing 100 per cent of the order value upfront, the settlement shall take place on T+2 Day.

The Centre is staring at missing its divestment target for FY 2022-23 as it plans to hold the part sale of its stake in Hindustan Zinc (HZL) unless the company calls off the nearly $3 billion cash acquisition of two Vedanta Group subsidiaries.

The Centre expected to raise Rs 51,000 crore from stake sales in various state-run companies, this year's budget documents showed. Data from the DIPAM website showed that proceeds from disinvestment stood at Rs 31,106.64 crore, only 48 per cent of the budgeted amount of Rs 65,000 crore. However, the mop-up estimate for the ongoing fiscal has been revised to Rs 50,000 crore.

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