The government has invited bids from merchant bankers for managing the share sale programme of state-owned Hindustan Aeronautics Ltd (HAL). HAL will appoint four merchant bankers - two domestic and two foreign - for the initial public offering (IPO) involving the sale of a 10 per cent government stake,sources said. The government is considering divestment of a 10 per cent stake in the company out of its 100 per cent shareholding through the IPO. The government is also considering an issue of bonus shares before the proposed disinvestment in order to make the shares more affordable to investors,sources added. Last month,the Defence Ministry had approved the disinvestment of 10 per cent of its stake in the country's only aerospace company in the next five years. If the stake sale goes through,HAL would be the third defence PSU to be divested after Bharat Electronics Ltd and BEML. HAL,with a turnover of over Rs 13,000 crore,is involved in almost all the country's military aerospace projects,worth several thousand crores of rupees. As of end-March,2011,HAL's paid-up capital stood at Rs 120.50 crore,comprising 12.05 crore shares. HAL was granted the status of a Navratna company in June,2007. Although the government has plans to raise Rs 40,000 crore through its disinvestment programme in the current fiscal,it has not been able to make much headway because of uncertain market conditions. With seven months already over,it has raised only Rs 1,144 crore from a stake sale in Power Finance Corporation (PFC). Plans are also being ironed out for the government to offload 5 per cent equity in power equipment-maker BHEL,which would fetch over Rs 4,000 crore.
