HAL Shares Slump As Government Looks To Cut Stake

Shares of Hindustan Aeronautics Ltd. as the government announced selling its stake in the company through an offer for sale (OFS) on March 23 and 24.

What Happened: The defence manufacturer on Wednesday informed that the government is looking to sell up to 3.5% stake in the company through an OFS. The floor price for the OFS is set at ₹2,450 – a 6.6% discount on the stock’s last closing price of ₹2,625.20.

The government currently owns a 75% stake in the aerospace defence company and looks to raise around ₹2,900 crore from the stake sale.

See also: Angel One Investors Rejoice At The Bourses Over Dividend Announcement

The company informed that the government proposes to sell up to 1.75% (58.51 lakh) equity shares of face
on March 23, 2023 for non-Retail Investors only and on March 24, 2023, for Retail Investors and non-Retail
Investors who choose to carry forward their un-allotted bids with an option to additionally sell
1.75% (58.51 lakh) equity shares of the Company.

However, global investment firm Morgan Stanley remained ‘overweight’ on the stock as it stated that the government’s OFS would increase the free float of the stock. The firm has a price target of ₹3,216 on the stock – an over 22% upside from the stock’s last closing price.

Price Action: HAL shares were down 4.95% to trade at ₹2,495.35 as the markets opened on Thursday.

Read next: Hero MotoCorp Shares Surge Fueled by Price Hike

Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.

Posted In: Defense Contractordefense sectorgovernment contractorsHALMorgan Stanley Capital International
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!