HAL awaits government nod to go public soon
February 10th, 2011 - 4:43 pm ICT by IANSBangalore, Feb 10 (IANS) India’s defence behemoth Hindustan Aeronautics Ltd (HAL) is awaiting the government’s green signal to go public soon to raise funds and improve its corporate governance, an official said Thursday.”Being a fully owned state-run enterprise, it is for the government to decide when to begin the disinvestment process and the quantum of dilution,” HAL finance director D. Shivamurti told reporters.
Though other city-based state-run defence firms such as Bharat Electronics Ltd (BEL) and Bharat Earth Movers Ltd (BEML) had gone public long ago, the government had been wary of diluting its 100 percent equity holding in the strategic HAL, a sole manufacturer of military aircraft and aerospace systems for the Indian armed forces.
“The process of making an initial public offer (IPO) is on for various reasons, including meeting corporate governance objectives, making public stakeholders and have financial muscle to meet our future requirements for scaling our strategic operations,” Shivamurti said on the sidelines of Aero India 2011 trade expo here.
Once the government approves divesting in the open market, the 70-year old company board will decide the quantum, value and the timing of the issue.
“We will be investing about Rs.20,000 crore (Rs.200 billion) over the next 10 years to modernise and expand our capacity to execute orders valued at Rs.100,000 crore (Rs.1 trillion). We plan to raise funds internally (about Rs.1,500 crore) and from the market through a combination of equity and debt instruments than depend on the government for capital investments,” Shivamurti said.
As a global player in the aerospace industry, the Rs.11,500-crore HAL makes various types of fixed wing aircraft under licensed production, rotary wing choppers and sub-systems primarily for the Indian Air Force (IAF), army and navy and Coast Guard.
“Though we have about Rs.9,000 crore in reserves and excellent credit rating to borrow in the debt market, we feel it’s time to tap the public for raising additional funds to meet our present and future investment requirements,” Shivamurti added.
The company has projected a turnover of Rs.12,600 crore for this fiscal (2010-11).
- Don't disinvest in HAL, says CPI-M - Sep 19, 2011
- Energy firm Soham raises Rs.125 crore from SBI fund - Nov 07, 2011
- Government mulls more funds to keep Air India flying - Sep 19, 2011
- Karnataka to have aerospace policy to woo investments - Aug 24, 2012
- L&T; planning private equity fund after IPO - Jul 25, 2011
- Reliance MediaWorks to raise Rs.600 crore through rights issue - Jul 25, 2012
- HAL disinvestment under consideration: Government - May 07, 2012
- State-run banks have lent Rs.6,901.86 crore to Kingfisher Airlines - Dec 13, 2011
- Government to raise Rs.4,000 crore by selling stake in SAIL (Lead) - Jul 20, 2012
- Rahi venture begins Gulbarga airport project - Aug 11, 2011
- Thales, BEL to form joint venture radar company (Lead) - Aug 29, 2012
- HAL prepares to manufacture Rafale combat jet in India - Feb 13, 2012
- Karnataka clears second phase of Bangalore Metro project - Jan 04, 2012
- Government allows state-owned firms to buy back shares - Mar 01, 2012
- Indian Sukhoi jets to have indigenous flight display system - Oct 20, 2010
Tags: aero india, aerospace industry, aerospace systems, army and navy, beml, bharat earth movers ltd, bharat electronics ltd, capital investments, debt market, defence firms, earth movers, financial muscle, government nod, indian air force, indian armed forces, initial public offer, public stakeholders, sole manufacturer, strategic operations, trade expo