"Offer for sale of 15% government shares in HAL was subscribed 1.60 times by non-retail investors. The government has decided to exercise the green shoe option," said Tuhin Kanta Pandey, secretary of department of investment and public asset management (DIPAM).
The Government of India is selling up to 15% of its stake in the country’s largest aeronautical company, by putting 3.34 crore shares amounting to 10% stake, through an offer for sale.
The floor price for the sale has been fixed at Rs 1,001 apiece, which can fetch the exchequer over Rs 5,000 crore. The sale is part of the government's divestment drive to reach the Rs 2.1 lakh crore target for FY 2020-21. Of this, Rs 1.20 lakh crore will come from disinvestment of public sector undertakings and another Rs 90,000 crore from stake sale in financial institutions.
The government has kept an option to sell an additional 5% stake, even though the offer price is lower than the share price of the company. About 20% of the offer size has been kept for retail investors, at a discounted rate.
"Retail investors get chance to bid on August 28, 2020 with a discount of 5% on the cut off price," Pandey said in a Twitter post. The buying window will close today as market hours end.
The government holds 89.97% stake in the company, which was listed in March 2018. IDBI Capital Markets & Securities, SBICAP Securities and YES Securities (India) are seller’s broker for the offer. IDBI Capital Markets is the settlement broker.
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