The Cabinet Committee on Economic Affairs has cleared the sale of 10 per cent equity of the government in Hindustan Aeronautics (HAL) through an initial public offering (IPO) in the domestic market.
It is learnt that the board of HAL would have to be restructured before the IPO and the IPO is expected next financial year.
Government holds 100 percent equity in the aerospace company and the stake sale would be done on the basis of Sebi (Securities and Exchange Board of India) rules and regulations, said an official statement.
As on March 31, the company’s paid-up equity stood at Rs 120.50 crore. The proposal to disinvest stake in HAL is aimed at funding the government’s plans to modernise the company, for which Rs 20,000 crore would be required through the next five years.
Earlier, the government had set up an expert group under former Cabinet secretary BK Chaturvedi to suggest steps to restructure HAL. Currently, it is awaiting the group’s report.
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