The Cabinet Committee on Economic
Affairs on Thursday approved 10 percent equity divestment in the 70-year-old
defence sector behemoth Hindustan Aeronautics Ltd (HAL) under a plant to mop up
around Rs. 40,000 crore from the market for the modernization of the Navratna Company.
The government will be bringing an Initial Public Offer
(IPO) in the domestic market as the company is still not listed. Five percent
discount on the issue price will be allowed for retail investors as well as to
eligible employees of HAL applying under the employees’ reservation portion. After
the divestment of 10 percent, Government of India’s shareholding in the company
would come down to 90 percent.
HAL is a Schedule – ‘A’, Navratna Central Public Sector Enterprise under the administrative control of the Ministry of Defence. It is engaged in the designing and development of Fixed Wing Aircraft, Rotary Wing Aircraft and their systems/accessories/avionics, manufacturing of Aircraft (Fighter, Trainers and Transport), Helicopter and associated aero engines, accessories and avionics for both military and civil applications.
HAL is a Schedule – ‘A’, Navratna Central Public Sector Enterprise under the administrative control of the Ministry of Defence. It is engaged in the designing and development of Fixed Wing Aircraft, Rotary Wing Aircraft and their systems/accessories/avionics, manufacturing of Aircraft (Fighter, Trainers and Transport), Helicopter and associated aero engines, accessories and avionics for both military and civil applications.
It has been on the insistence of the
finance minister to divest the profit making PSUs that the proposal has been
approved. However, it will be a while before the shares of the 70-year-old PSU
will be floated in the market. And the company is also planning to get listed
in the stock exchange.
The present annual sales turnover of
the company is around Rs. 13,000 crore. Its products track record
consists of 11 types of Aircraft from in-house R&D and 14 types of license
production inclusive of 8 types of Aero Engines and over 900 items of Aircraft
System Equipment (Avionics, Mechanical, and Electrical). HAL has produced
around 3400 aircraft, 3600 aero engines and overhauled around 8320 aircraft and
27800 engines by 2005-06 besides manufacture/overhaul of related accessories
and avionics.
Even though the government was wary
of diluting its control on the defence behemoth it has already carried out
disinvestment in two defence PSUs - Bharat Electronics Ltd and Bharat Earth Movers
Limited. Presently the government has 75 percent stake in BEL and 66 percent in
BEML.
