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Shares of PSU defence company Hindustan Aeronautics Limited (HAL) fell 5% in the early hours today as news of the government's plan to offload a 3.5% stake forced investors to sell their holdings.
For the unversed, HAL is a defence PSU engaged in the design, development, manufacture, repair and upgradation of aircraft. Its main products are fighter aircraft, futuristic aerial combat vehicles & components and accessories of fighter aircraft.
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It has 20 product divisions and 11 R&D centres located all across India. It is the manufacturer of several renowned aircraft, such as Teja's helicopter and the Sukhoi 30 aircraft. HAL is often referred to as the backbone of the IAF. The government of India holds 75.2% of the company.
The government has announced that it will be selling 3.5% of the aerospace, and defence PSU to raise Rs 2,867 crores. The sale will be made through an OFS and will see the government sell around 1.2 crore shares in the company.
IDBI Capital Markets and Securities, Yes Securities & SBICAP Securities are the managers for the offer.
However, the same was announced for Rs 2,450 per share, which was a 6.6% discount from the existing market price, resulting in a decline in the share price.
Shares of HAL, which had been on a losing streak for the past two weeks, witnessed a massive gap down opening today as the stock opened at Rs 2,493 per share, 5% below yesterday's close. At the time of reporting, the stock was trading around Rs 2,495.25 per share, down 4.9%.
- Aman Agarwal
