The government has approved the sale of a 10 per cent stake in public sector military planemaker Hindustan Aeronautics Ltd (HAL) through an initial public offering.
This comes at a time when it is witnessing competition from private players such as Reliance Defence, Adani and Tata Group bidding to bag fighter plane contracts for the Indian armed forces.
Bengaluru-based HAL filed its draft red herring prospectus (DHRP) with market regulator Securities and Exchange Board of India (Sebi) on September 29, the firm stated on Sunday.
So far, HAL has been the sole player in the country building fighter aircraft such as Sukhoi-30-MkI and the Hawk advanced jet trainers under licenced production and helicopters such as Dhruv advanced light helicopter, designed in-house. It is also the designated agency to produce Tejas, the homegrown light combat aircraft for the air force.
In September, HAL Chairman and Managing Director T Suvarna Raju said the company has an order book of Rs 41,000 crore which is “very low for an aeronautical company”.
It has orders to make 35 Su-30-MkI planes and 40 Tejas aircraft, while awaiting confirmation of a follow-on order for 83 Tejas planes. Last year, when India signed a deal to buy 36 Rafale jet aircraft from France after it cancelled a tender to buy 126 multi-role medium combat aircraft, it designated Reliance Defence as the local partner to deliver offsets worth over Rs 21,000 crore.
Incidentally, Rafale had shortlisted Reliance as its local partner to deliver offsets when it bid for the 126 plane deal that it won in 2012.
HAL is also not in the race to build the 100-200 single engine jet fighter deal for which Sweden’s Saab is fielding the Gripen and US plane maker Lockheed Martin plans to sell its latest block of F-16 fighter. Saab has signed up the Adani Group that lacks aerospace manufacturing expertise as its local partner, while Lockheed Martin has chosen Tata Advanced Systems Ltd, a Tata Group firm that has so far build systems and components for global aerospace makers.
The public sector aircraft maker had reported profit before tax of Rs 3,294 on revenue of Rs 17,406 crore for FY17.