Back-to-back initial public offerings of state-owned Bharat Dynamics (BDL) and Hindustan Aeronautics (HAL) will hit market next week to help the Centre divest a portion of stakes in these defence PSUs and raise about Rs 5,200 crore as part of its Rs 1-lakh-crore disinvestment programme for 2017-18. BDL IPO price bad is Rs 413-428/share and would be open for subscription during March 13-15. A 12% stake sale in BDL would fetch the exchequer up to Rs 960 crore. The HAL IPO for a 10.2% stake sale would be open during March 16-20. Going by the price band of Rs 1,215-1240, the Centre could mop up about Rs 4,200 crore via the HAL issue. Both the defence PSUs are strong players in their fields with no private sector competition. BDL, engaged in manufacturing of guided missile systems, has a strong execution capability. It had a topline and bottomline growth of 38.3% and 15.9% CAGR, respectively, between FY12 and FY17.
BDL also has a healthy balance sheet with nil debt and cash balance of Rs 1,311 crore. BDL had also bought back shares worth Rs 198.85 crore in FY16 and Rs 450.53 crore from the Centre in FY18 as part of capital restructuring, boosting disinvestment revenues. Listing of the military aircraft maker has been hanging fire since 2011. Pending the IPO, the company’s buyback of shares fetched the Centre Rs 921.5 crore in disinvestment revenues in FY18 and Rs 4,284.37 crore in FY16. HAL had a net worth of Rs 12,537 crore as on March 31, 2017. Even though PSU IPOs hit market after a gap of five years, the Department of Investment and Asset Management piloted mega listings of General Insurance Corp, New India Assurance, HUDCO and Cochin Shipyard to mobilise Rs 19,035 crore so far in FY18. The previous highest disinvestment receipt from PSU listings was Rs 17,500 crore in FY11. Prior to FY18, the last PSU IPO to hit market was that of NBCC in March 2012. The Centre has garnered Rs 92,745 crore so far in FY18 and needs another Rs 7,255 crore to meet the revised disinvestment revenue target of Rs 1 lakh crore for the year. These IPOs and a few more transactions such as buybacks would suffice to meet the revised target, officials said.