The disinvestment department is working on launching the equity sale of Hindustan Aeronautics Ltd. in the second half of the current fiscal, which will be the first IPO of a State-owned firm after a gap of at least two-and-a-half years.

“We are working on the DRHP (Draft Red Herring Prospectus) for HAL. We plan to file it with SEBI by September,” a government official told PTI.

The initial share sale offer to offload 10 per cent stake in the State-run defence equipment maker is expected to hit the markets only in the second half of the current fiscal ending March 2015.

The Initial Public Offer of HAL would be the first such government share sale since April 2012 when the government came out with IPO of NBCC.

In November 2012, the Cabinet had approved offloading 10 per cent stake or 1.20 crore equity shares in HAL through an IPO. The government has already appointed four merchant bankers — SBI Cap, Goldman Sachs, Barclays and Axis Capital — for managing the HAL stake sale.

A ‘Navaratna’ company, HAL provides maintenance and overhaul services of aircrafts.

It had a paid-up capital of Rs. 120.50 crore, comprising 12.05 crore shares of face value of Rs. 10 each at the end of March 2011. Currently, the company is fully-owned by the government.

The stake sale in HAL will help the government move towards the disinvestment target of Rs. 36,925 crore in 2014—15.

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