Govt to raise Rs 2,800 cr by selling stake in HAL

PTI

New Delhi, March 23

The Finance Ministry on Thursday decided to exercise the green shoe option as the offer-for-sale of Hindustan Aeronautics Ltd (HAL) has received a good response, with the issue subscribing 4.5 times on day one.

"Offer for Sale (OFS) of government shares in HAL got great response on day one. Issue subscribed 4.5 times of base size at a clearing price above the floor price by non-retail investors. Govt has decided to exercise the green shoe option. Retail investors will get a chance to bid tomorrow," DIPAM Secretary Tuhin Kanta Pandey said in a tweet.

The OFS comprised base issue size of 1.75% or 58.51 lakh shares, with an option to retain oversubscription of an equal quantum.

The government on Wednesday proposed to sell up to a 3.5% stake in HAL at a floor price of Rs 2,450 a share, if fully subscribed, the OFS would fetch about Rs 2,800 crore to the exchequer. On the first day of OFS, shares of HAL closed 4.87% down at Rs 2,497.40 each on the BSE. The floor price is at a discount of around 6.7% over the closing share price of HAL on the BSE.

The government currently holds 75.15% of HAL, which is a Central Public Sector Enterprise (CPSE) under the Defence Ministry.

The proceeds from HAL OFS would add up to the government's disinvestment kitty for the current fiscal.