HAL disinvestment likely in second half of fiscal year

Government is likely to offload 10 per cent stake in defence equipment maker Hindustan Aeronautics (HAL) through an initial public offer in the second half of the current fiscal year.

"We will start HAL disinvestment process shortly. The stake sale is likely around November-December," a Finance Ministry official said.

The government has already appointed four merchant bankers -- SBI Cap, Goldman Sachs, Barclays and Axis Capital -- for managing the stake sale in HAL.

"Merchant bankers are conducting due-diligence on 29 production divisions, nine joint ventures and 10 Research & Design centres," the official said, adding the Defence Ministry is working on restructuring of company's board.

The Cabinet in November last year had approved selling of 10 per cent stake or 1.20 crore equity shares through an initial public offer (IPO) of Navratna defence equipment maker HAL. The company provides maintenance and overhaul services to aircraft.

The paid-up capital of HAL is Rs 120.50 crore comprising 12.05 crore shares of face value of Rs 10 each as on March 31, 2011. The government holds 100 per cent of the paid-up capital of the company.

The Defence Ministry is in the process of restructuring the board of the defence PSU. The government is in the process of modernising the company for which Rs 20,000 crore would be required over the next five years.

The government had set up expert groups under former Cabinet Secretary B K Chaturvedi for restructuring of HAL.