THE SHARE price of Hindustan Aeronautics Ltd (HAL) traded in the red on Thursday (March 23) as the government announced its disinvestment plan of up to 3.5% stake for Rs. 2,867 crore. During today’s intraday trading session, HAL shares slumped 5.35% at Rs. 2,484.45 per piece.

It is to be noted that the Indian government is planning to sell up to a 3.5% stake in the defence company via an offer for sale (OFS) to raise capital.

The floor price has been fixed at Rs 2450 per piece, which is down over 1% from the current price. The offer for sale (OFS) issue will open from March 23 to March 24, 2023.

Brokerage firm Morgan Stanley has given an ‘overweight’ rating to the HAL stock with a target price of Rs 3,216.

In the last one year, the returns from the stock have increased 76.59%, while the year-to-date (YTD) performance of the stock has fallen by almost 2.19%. Currently, the government owns 75.15% of Hindustan Aeronautics Ltd.

Only non-retail investors can place their bids on Thursday. Meanwhile, retail and non-retail investors, who want to carry forward their unallotted bids, are allowed to place their bids on Friday. Retail investors are individual investors who put bids for shares of total value not exceeding Rs 2,00,000. Funds raised from divestment in state-owned firms are used by the government to spend on infrastructure-building.

A look at the financial health of Hindustan Aeronautics Ltd:

In FY22, HAL’s net profit increased 57% on year to Rs 5,087. Meanwhile, in the December quarter of FY23, the company reported a 23% on-year rise in net profit at Rs 1,154 crore. At the current price of Rs 2484.45, the company commands a market capitalisation of Rs 83,076 crore.

Hindustan Aeronautics Limited is a government-owned aerospace and defence company in India. The company is involved in the manufacturing, design, and development of several products including, aircraft, helicopters, aero-engines, accessories and aerospace structures.

The company has maintained a firm order book position of Rs 84,000 crore equivalent to 3.2 times the Trailing 12-Month revenues.

Coming to the domestic market, the two benchmark indices Nifty and Sensex traded lower today down 0.0070% and 0.015% respectively, during intraday trading.