The Rs 2,800-crore offer for sale of Hindustan Aeronautics was subscribed 3.8 times on the final day, with the retail portion getting a subscription of 1.23 times, exchange data as on 3.30 pm showed. The government is selling 3.5% stake in HAL at a floor price of Rs 2,450 apiece. The OFS consisted of a base issue size of 1.75% or 5.85 million shares, with an option to retain an over-subscription of an equal amount.
Shares of the company ended 2.9% higher on Friday to end at Rs 2,569 on the BSE. Currently, the public shareholding of the company is marginally lower than 25%, the minimum public shareholding required. The OFS will take this comfortably above this threshold.
Life Insurance Corporation of India is the single largest public shareholder (4.07%), while mutual funds (7.4%) and foreign portfolio investors (7.14%) are the largest groups of investors in the stock.
HAL is now a potential inclusion to the MSCI India Index at the May Quarterly Comprehensive Index Rebalance, according to analysts. At a full market cap of $10.6 billion, the stock easily meets the threshold for full market cap.
Passive trackers will need to buy 6.687 million shares at a FIF of 25%, at the close of trading on 31 May. This could result in inflows of $213 million. The shares of the company have surged 83.5% in the past year and are now close to its highs.
The company has benefited from fresh orders and government initiatives such as Atmanirbhar Bharat Abhiyaan, resulting in high revenue visibility, according to analysts.
Back in 2020, the government had sold 15% stake in HAL at Rs 1,001 per share to raise about Rs 5,000 crore via OFS.
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