HAL Offer Subscribed 3.8 Times

HAL shares plummeted as the government announced OFS at a lower price.

Exchange data as of 3:30 pm showed HAL’s Rs 2,800 crore sale offer was 3.8 times subscribed on the last day, with the retail tranche 1.23 times subscribed. The government sold a 3.5% stake in HAL at a floor price of Rs 2,450 per share. The base issue size for OFS is 1.75% or 5.85 million shares, with an option to retain an equal amount of oversubscription.

Shares of the company closed 2.9% at Rs 2,569 on the BSE on Friday. Currently, the company’s public shareholding is just under 25%, the minimum public float. OFS will easily place it above that threshold.

LIC is the largest single public shareholder (4.07%), while mutual funds (7.4%) and foreign portfolio investors (7.14%) are the largest groups of investors in equities.

According to analysts, HAL will likely be included in the MSCI India Index when the composite index rebalances in the May quarter. With a total market capitalisation of $10.6 billion, the stock easily meets the total market capitalisation threshold.

Passive trackers must purchase 6.687 million shares at a 25% FIF by the close of trading on May 31. This could result in an inflow of $213 million. Shares of the company have soared 83.5% in the past year and are now near their highs.

Analysts say the company has benefited from new orders and government initiatives such as Atmanirbhar Bharat Abhiyaan, resulting in high revenue visibility.

In 2020, the government sold a 15% stake in HAL at Rs 1,001 per share, raising around Rs 5,000 crore through OFS.

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