Hindustan Aeronautics Limited IPO
India has the third largest military in the world and is the sixth largest spender in defence. India is also one of the largest importers of Conventional defence equipment and spends approximately 30% of its total defence budget on capital acquisitions. 60% of Indian’s defence-related requirements are currently met through imports. In addition, the ‘Make in India’ initiative by the Government is focusing its efforts on increasing indigenous defence manufacturing with the aim of becoming self-reliant. The opening up of the defence sector for private sector participation is helping foreign OEMs to enter into strategic partnerships with Indian companies and leverage opportunities in the domestic market as well as global markets. India’s focus on indigenous manufacturing in the defence sector has yielded certain benefits as the MoD over the last two years unveiled several products manufactured in India including the LCA Tejas, the composites sonar dome, a portable telemedicine system for the armed forces, penetration-cum-blast and thermobaric ammunition specifically designed for the Arjun tanks, the Varunastra heavyweight torpedo manufactured with 95% locally sourced parts and medium-range surface-to-air missiles. The Defence Acquisition Council under the MoD cleared defence sector transactions with a value of more than 820 billion under the ‘Buy and Make (Indian)’ and ‘Buy Indian’ categories. These transactions include the procurement of Light Combat Aircraft, T-90 tanks, mini UAVs and light combat helicopters. During the Financial Years 2016, 2015 and 2014, 20,592 million, 16,820 million and 11,534 million worth of defence platforms, equipment and spares manufactured in India were exported to more than 28 countries. The major defence equipment exported by the DPSUs and Ordnance Factory Board (“OFB”) are patrol vessels, helicopters including their spares, sonars and radars, avionics, radar warning receivers, small arms, small calibre ammunition, grenades and telecommunication equipment. Items for which there is a capacity constraint, the DPSUs are permitted to export up to 10% of their annual production to explore market opportunities for exports. The Union budget of the Government of India for 2017-18 allocates 2,623,900 million for defence expenditures excluding pension, which represents an increase of 5.3% from 2,490,990 million for 2016-2017 (Budgetary Estimate). However, this allocation represents a decrease to 1.6% in the allocation as a percentage of GDP for 2017-18 from 1.7% for 2016-17 and constitutes the lowest allocation as a percentage of GDP since 2000-01.
Objects of the Hindustan Aeronautics Limited IPO:
Hindustan Aeronautics Limited IPO Details:
| Open Date: | Mar 16 2018 |
| Close Date: | Mar 20 2018 |
| Total Shares: | 3,41,07,525 |
| Face Value: | ₹ 10 Per Equity Share |
| Issue Type: | Book Build Issue |
| Lot Size: | 12 Shares |
| Issue Price: | ₹ 1215-1240 Per Equity Share |
| Retail Discount: | Rs 25 Per Share discount for Retail & Employee |
| Listing At: | NSE,BSE |
| Listing Date: | Mar 28 2018 |
Promoters And Management:
Company Business:
Financials of Hindustan Aeronautics Limited IPO:
| Financial Performance (Hindustan Aeronautics Limited) | ||||||
| Years | 2014 | 2015 | 2016 | 2017 | 2017-18 (H1) | CAGR (2015-17) |
| Total Revenue | 17,327.6 | 17,362 | 18,754.8 | 19,596.6 | 5665.9 | 8% |
| Profit after Tax | 2541.1 | 929.0 | 2011.1 | 2630.8 | 384.5 | NA |
Lead Manager of Hindustan Aeronautics Limited IPO:
Registrar of Hindustan Aeronautics Limited IPO:
Company Address:
Bid Details of Hindustan Aeronautics Limited IPO as on
20-Mar-2018 20:00:01 IST
Discussion on Hindustan Aeronautics Limited IPO:
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As expected in the beginning this will be another disaster in the long list of govt PSUs which are known to destroys investors wealth. The HAL listed today at heavy discount of 9% on NSE and once again after Bharat Dynamics Limited investors have lost money here. People generally apply in IPOs to make quick bucks within 10-12 days but when greed of promoters takes lead such losses are inevitable. In this case , the promoter of HA,L the Govt. of India’s has issued shares at high valuation which was punished badly by market. So guys always careful when company is coming up with OFS and that too Govt. PSUs.
Hindustan Aeronautics Limited shall be listed and admitted to dealings on the Exchange in the list of ‘B’ Group of Securities Wednesday, March 28, 2018
BSE Code: 541154
NSE: HAL
ISIN NO: INE066F01012
Hindustan Aeronautics Ltd., ( HAL ) ; Basis Of Allotment
Ret : 0.3584×
12 Shs Cat 1:1
NII : 0.0336×
Listing : Wed 28 Mar 2018 on NSE & BSE.
IPO Price Fix for Other Cat @ Rs.1215/-.
Price Fix for Ret & Emp @ Rs.1190 ( Excluding Discount of Rs.25/- )
Shares of HAL has been alloted to LIC worth of ₹2902.5 Crores (which is around 60% of the issue size). As per this data, LIC had bidded 140% of shares reserved for QIB category and has been allotted the same due to low subscription in other categories. A pure waste of Retail Public money (who takes insurance policies and pay premium) by LIC in such a IPO where no FII’s and a very few mutual funds/ PSU’s banks shown there interest. Has seen the subdued listing of Bharat Dynamics Limited yesterday and now this one is ready for the same. Fools Paradise 👎🏻
The IPO did not receive a single bid from foreign institutional investors (FIIs). Despite the large issue size, the HAL IPO was handled by just two investment banks, SBI Caps and Axis Capital. Business Standard had earlier reported about Goldman Sachs and Barclays dropping out of the process due to issues over fees and a three-year delay in the IPO. Typically, an IPO of this size is handled by at least four or six bankers, who tap into their client base to generate demand.
“Last year, when the government revived the HAL IPO plan, it decided to continue with investment bankers who were already appointed, instead of awarding a fresh mandate. This was even after two banks decided to walk out. Probably the decision was driven by the fact that it was a zero-fee mandate,” an industry player said.
State-run aerospace and defence firm Hindustan Aeronautics’ IPO, which hit the Street after a five-year struggle, managed to sail through on the tail end of its final day.
Insurance behemoth LIC bid for shares worth Rs 2,500 crore, said three people aware of the development. That accounts for roughly 60% of the total Rs 4,229 crore that the government aimed to raise through the public issue. LIC’s participation in the IPO could not be independently ascertained.
Foreign portfolio investors did not bid for a single share in the issue, data showed.
Govt is aggressively doing OFS to raise money from the market at exorbitant prices to improve their balance sheet. They are not thinking from the prospective of a shareholder. So it is advisable not to put money in govt PSU as they have in past not created wealth for investors.
All brokers and fund houses are rigged to give it a thumbs up. I bet this company will be available at below 200 in long term. I cannot say whether it will give listing gains or not coz listings are normally managed. Govt is sucking public money by all means. If Nirav Modi was given a year or two, he would have launched an IPO and we would have funded PNB loss. Be careful before investing in any govt IPOs. They are just not sincere and no apathy for public money or services.