India's only state-owned aircraft maker is ready to go public. Hindustan Aeronautics Limited, the Bengaluru-based public sector undertaking, is going to come out with an Initial Public Offering (IPO) soon, thereby fetching funds from investors for its future growth.
The government has already approved a 10 per cent disinvestment in HAL in 2012 when a Cabinet Committee on Economic Affairs (CCEA) had approved the proposal from the Ministry of Defence and had given a time of five years to complete the process. The proposal had been mooted in 2011. The proposal for disinvestment in HAL was placed before the CCEA in this light in view of the government's plans to modernise the company for which ₹20,000 crore would be required over the next five years. The IPO will be in consonance with that 2012 decision, as and when it is issued.
In preparation for this IPO, the government had in March 2016 wrapped up the 2015-16 disinvestment process by garnering around ₹4,500 crore through a buyback of shares from HAL and Bharat Dynamics Limited (BDL). The buyback of shares has strengthened the balance sheet of HAL and the company has now prepared a Draft Red Herring Prospectus (DRHP) for the IPO. The DRHP is likely to be filed with Securities and Exchange Board of India (SEBI) soon.
At its latest Board meeting at the end of March 2017, HAL had discussed the IPO and had finalised some of the draft documents in preparation for going public with