The IPO (initial public offering) of Hindustan Aeronautics (HAL) which opened on 16 March 2018 got subscribed 44% at the end of the second day of bidding on Monday with QIBs emerging as the lead bidders. Hindustan Aeronautics Ltd has expected to raise up to Rs 4,229 crore at the upper end of the price band of Rs 1,240 in the three-day bidding process from 16 to 20 March 2018 of the IPO. In the initial shares sale, the promoter, GoI (Government of India) is selling about 3,41,07,525 shares of Hindustan Aeronautics through an offer for sale route. A relatively higher bidding was observed on the counters of QIBs (Qualified Institutional Buyers) as compared to the categories of NIIs (non-institutional investors), retail investors and employees.
The public offer Hindustan Aeronautics received bids for 1,53,89,868 shares as against the total issue size of 3,41,07,525 equity shares taking the total subscription to 45% at the end on the second day, as per the data available at stock exchanges. The shares reserved for the QIBs category was subscribed 77%, the portion set aside for the NIIs was subscribed 1.9%, the quantum allocated for retail investors was subscribed 7%. The shares held for the employee category was subscribed 4%. Hindustan Aeronautics Ltd has offered a discount of Rs 25 per equity shares on the offer price for retail bidders and the eligible employees.
For the IPO, investors can bid a minimum of 12 equity shares and in multiples of thereafter. Hindustan Aeronautics is India’s largest defence PSU which designs, develops, manufactures, repairs and upgrades aero-engines, avionics, accessories and aerospace structures. The floor price is 121.5 times and the cap price is 124 times the face value. Hindustan Aeronautics had appointed SBI Capital Markets Ltd, Axis Capital Ltd as the book running lead managers while Karvy Computershare Pvt Ltd is the registrar to the issue. There are no listed companies in India that engage in a business similar to that of the Hindustan Aeronautics. Hence, industry comparison in relation to the Hindustan Aeronautics is not applicable, according to the DRHP of Hindustan Aeronautics Ltd.