Indian Government To Sell 10 Percent of HAL .

Discussion in 'Defence & Strategic Issues' started by Zebra, Sep 25, 2011.

  1. Zebra

    Zebra Senior Member Senior Member

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    By VIVEK RAGHUVANSHI
    Published: 23 Sep 2011 11:36

    NEW DELHI - The Indian government has decided to sell 10 percent of its stake in Hindustan Aeronautics Ltd. (HAL).

    With the proposed 10 percent equity sale, HAL shares will be listed on the Indian stock markets for the first time. The listing of HAL will not affect ownership, as the Indian government still will hold nearly 90 percent of the shares. But the board of directors would gain members from outside the government and bureaucracy.

    The partial stake sale of HAL is likely to be increased in coming years, but the government is unlikely to shed its control, a Defence Ministry official said.

    Currently, the other state-owned defense units whose shares had been sold to the public include Bharat Electronics and Bharat Earth Movers.

    HAL has annual sales of about $3 billion and orders worth $10 billion in hand. HAL's hands are full as the license producer of the Russian Sukhoi, the British Hawk and the selected multirole fighter. In addition, HAL is the sole manufacturer of helicopters, aircraft and UAVs, and is developing the light utility helicopter and Light Combat Aircraft.

    HAL was formed in 1964 with the merger of Hindustan Aircraft with Aeronautics India and Aircraft Manufacturing Depot. The company has 19 production units and 10 research and design centers spread across eight locations.

    HAL is also the lead agency for the license production of Medium Multirole Combat Aircraft program, in which the Dassault Rafale and the Eurofighter are in final competition. After the selection, the fighter will be license-produced at HAL facilities.

    Indian Air Force sources said they are not convinced HAL will be able to absorb the technologies involved in the license-production of either advanced fighter.

    There also had been problems in the license-production of the British Hawk at HAL facilities, Air Force sources added.

    Indian Government To Sell 10 Percent of HAL - Defense News
     
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  3. Galaxy

    Galaxy Elite Member Elite Member

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    Sell 51% so that private company can take some decision and work will happen rapidly. I am tired with such PSU slow work.
     
  4. agentperry

    agentperry Senior Member Senior Member

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    its a bad bad move. they should trifurcate or bifurcate the HAL but not sell stakes of whole of the HAL.
     
  5. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    have we not seen enough of all this tamasha earlier as well? last year was full of it, they are never going to do strategic sale, its just a move to fill up the coffers to minimize fiscal deficit which in the 1[SUP]st [/SUP]quarter for the fiscal is over 7.5%!

    anyways any details on how the 10% will be off-loaded? please share or is it all going to the retail investor.
     
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  6. nitesh

    nitesh Mob Control Manager Stars and Ambassadors

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    ^^
    There will be a portion for retail investors too, let's grab the share :D
     
  7. Rahul92

    Rahul92 Senior Member Senior Member

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    The question is whom are they gonna sell it to
     
  8. Rahul Singh

    Rahul Singh Senior Member Senior Member

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    It's of no strategic value, only a passionate or one with strategic long term goal will take chance. Said that, i am not in favor of selling stakes as whole, rather would like to see HAL trimming itself by getting rid of engine assembly and parts manufacturing facilities to one interested private company. With no plan to enter civilian market it will be better if HAL gets rid of Transport aircraft assembly centers like Kanpur too to interested private sector company so that projects like SARAS, RTA, NM-5, HANSA could succeed on commercial front.
     
  9. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Does HAL even make money? I would imagine once it is audited it would be a redline company.
     
  10. Rahul Singh

    Rahul Singh Senior Member Senior Member

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    Sheer size of IAF is more than enough for HAL to make big bucks and will continue to make on in future as well, as long as it can continue monopolizing which is exactly the area of concern.
     
  11. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

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    It seems to have had an revenue of 2.91$ billion and had an income of 606.1$ million. In way that is not bad but if they open it up for free market then probably it wont do well in its current form but if it is run by a good business man then it will be very competitive owing to better manufacturing costs etc.,
     
  12. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

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    This is HAL current contracts in the pipe line.

    International deals

    HAL Dhruv helicopters of the Ecuadorian Air Force in 2009 Aero India.
    An IAF BAe Hawk being license-produced at the HAL Hawk production facility in Bangalore.

    The US$10 billion fifth-generation fighter jet program with the Sukhoi Corporation of Russia.[2][3]
    US$1 billion contract to manufacture aircraft parts for Boeing.[4]
    Multi-role transport aircraft project with Ilyushin of Russia worth US$600 million.[5]
    120 RD-33MK turbofan engines to be manufactured for MiG-29K by HAL for US$250 million.[6]
    Contract to manufacture 1,000 TPE331 aircraft engines for Honeywell worth US$200,000 each (estimates put total value of deal at US$200 million).[7]
    US$120 million deal to manufacture Dornier 228 for RUAG of Switzerland.[8]
    Manufacture of aircraft parts for Airbus SAS worth US$150 million.[9]
    US$100 million contract to export composite materials to Israel Aircraft Industries.[10]
    US$65 million joint-research facility with Honeywell and planned production of Garrett TPE331 engines.[11]
    US$50.7 million contract to supply Advanced Light Helicopter to Ecuadorian Air Force.[12] HAL will also open a maintenance base in the country.[13]
    US$30 million contract to supply avionics for Malaysian Su-30MKM.[14]
    US$20 million contract to supply ambulance version of HAL Dhruv to Peru.[15]
    Contract of 3 HAL Dhruv helicopters from Turkey worth US$20 million.[16]
    US$10 million order from Namibia for HAL Chetak and Cheetah helicopters.[17]
    Supply of HAL Dhruv helicopters to Mauritius' National Police in a deal worth US$7 million.[18]
    Unmanned helicopter development project with Israel Aircraft Industries.[19]

    Domestic deals


    180 Sukhoi Su-30MKI being manufactured at HAL's facilities in Nasik and Bangalore. The total contract, which also involves Russia's Sukhoi Aerospace, is worth US$3.2 billion.
    200 HAL Light Combat Helicopters for Indian Air Force and 500 HAL Dhruv helicopters worth US$5.83 billion.
    US$900 million aerospace hub in Andhra Pradesh.[20]
    US$57 million upgrade of SEPECAT Jaguar fleet of the Indian Air Force.[21]
    US$55 million fighter training school in Bangalore in collaboration with Canada's CAE.[22]
    64 MiG-29s to be upgraded by HAL and Russia's MiG Corporation in a program worth US$960 million.[23]
    Licensed production of 82 BAe Hawk 132.
     
  13. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

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    They should sell at least 50% of their share to Private sector, with certain conditions of haveing an Indian ownership not selling majority shares to foreign companies, ensuring maximum returns to India and profit stays in India for growth of the industry.
     
  14. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Without it being on an IPO it hasn't been independently audited yet. Once a clearing house gets done with it we will know if it is a value trade or a penny stock like UAC. 20% is a bit high for a profit margin which will bring its numbers into question, especially being a state company.
     
  15. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

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    Well if they have the balls to go public then probably they are confident about their books, you cant go public if your balance sheet is not good enough and did not show profits. Independent auditing by investment banking firms are not very honest either, they allow fudging up if they get something in the deal.

    Also i doubt a government company will do penny tradeing, why would you say that? You always look at the negative side if it is any country outside the west, People outside the west are bad in general? lol

    For all the flaging HAL is a honest company, there is no corruption inside. There is only administration problems.
     
    Last edited: Sep 26, 2011
  16. Zebra

    Zebra Senior Member Senior Member

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    Banks line up to lead Hindustan Aeronautics IPO .

    By Jon Grevatt
    11/11/2011
    International investment banks lined up on 11 November for the right to manage the expected USD400 million initial public offering (IPO) of part of India's largest defence company: state-controlled Hindustan Aeronautics Limited.

    Foreign and Indian banks - including Morgan Stanley, Barclays, ICICI Securities and Kotak Mahindra Bank - were expected to be involved in the bidding to lead the IPO on the Bombay Stock Exchange.

    The IPO schedule will be set by the selected managers, but the government has previously indicated it might not take place for several years. Proceeds of the sale will initially be returned to the government before being re-allocated towards HAL development activities.

    Documents published by the Ministry of Finance (MoF) also reveal that the government has approved an authorised share capital of HAL at INR1.6 billion (USD31.8 billion) comprising 160 million shares with a face value of INR10. The paid-up capital of HAL, said the MoF, is INR1.205 billion comprising 120.5 million shares with a face value of INR10. The government currently owns 100 per cent of the company's paid-up capital.

    Defence Security Report
    SOURCE : janes.com
     
  17. Shaitan

    Shaitan Zandu balm all day Senior Member

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    Govt to sell 10% stake in HAL


    New Delhi: The government has agreed to sell a 10 per cent stake in state-owned aircraft maker Hindustan Aeronautics Ltd (HAL), a senior minister said on Thursday.
    Science and Technology Minister, Jaipal Reddy, did not clarify on the timeline of the divestment or on the price the government expects to receive on the stake sale.

    India plans to sell stakes in 15 state-run firms by the end of March next year and looks to raise 300 billion rupees ($5.4 billion) from the sales to help plug a yawning gap in the fiscal budget.
     

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