A proposal for disinvestment of 10 per cent of government equity in the country's only state-owned aerospace firm Hindustan Aeronautics Limited was approved by the Union Cabinet today.
"The Cabinet Committee on Economic Affairs (CCEA) has approved divestment of 10 per cent equity in HAL out of its
holding on 100 per cent through an Initial Public Offer (IPO) in the domestic market as per the SEBI rules and regulations," an official statement said here.
Addressing the media on the issue, Finance Minister P
Chidambaram said it would be basically an IPO and for this
purpose, a restructuring of the HAL board will have to be
done. He said the IPO would be issued only in the next fiscal only.
The statement said paid up equity of the so far-unlisted
company on March 31 this year was Rs 120.50 crore.
The disinvestment was been mooted before the CCEA amid government's plans to modernise the company for which Rs 20,000 crore would be required over next five years.
The government had set up expert groups under former
Cabinet Secretary B K Chaturvedi for the restructuring of
HAL and is awaiting its report for suggesting measures for
HAL is at present handling key projects for the Indian
armed forces such as the development of Tejas light combat aircraft, Dhruv advanced light helicopters, indigenous production of Russian-origin Su-30MKI fighter planes.
It is preparing to handle future projects such as the
indigenous production of medium multi-role combat aircraft
(MMRCA) and fifth-generation fighter aircraft (FGFA), light
utility helicopters and multi-role transport aircraft