The initial public offering (IPO) of Hindustan Aeronautics was subscribed by 0.24 times on Friday with investors bidding for 81.09 lakh shares against 3.41 crore shares reserved for them.
The initial public offering (IPO) of Hindustan Aeronautics was subscribed by 0.24 times on Friday with investors bidding for 81.09 lakh shares against 3.41 crore shares reserved for them. Qualified Institutional Buyers bid for 0.43 times, High net worth Individuals bid for 0.01 times, Retail investors bid for 0.07 times and Employees bid for 0.03 times of the shares reserved for them. The IPO of the government-owned aerospace company is priced between Rs 1,215 to Rs 1,240. The IPO is an offer for sale of 3.41 crore shares and when calculated at the upper band of the issue price the company could raise up to Rs 4,229 crore. The offer will close on Tuesday. Retail investors will get a discount of Rs 25 on offer price. Bids can be made for a minimum of 12 shares and multiples of 12 after that. The 100% offer-for-sale constitutes 10.20% of the post-offer paid up equity share capital of the company. The offer is a part of the disinvestment programme of the government, and all the proceeds will go to the central exchequer. The company is engaged in the design, development, manufacture, repair, overhaul, upgrade and servicing of a range of products including, aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures.
The company has 20 production divisions and 11 research and design centers (“R&D Centres”) located in India. As of December 31, 2017, the company had an order book worth Rs 68,461 crore, which includes products and services to be manufactured and delivered. For the six-month period ended September 30, 2017, Indian Defence Services accounted for 91.4% of the company’s total sales.
For the period ended September 2017, the company posted a net profit of Rs 391 crore. For the year ended March 2017, the company posted a net profit of Rs 2,624 crore. Hindustan Aeronautics joins a long list of companies that have raised funds from the market in the recent past. In 2017, 36 companies raised Rs 67,147 crore through IPOs. Listing gains and the positive sentiment in the market are among the reasons attributed to the trend.