India is likely to divest about 10% equity in the state-run Hindustan Aeronautics Limited (HAL), the country’s only manufacturer of military aircraft.

“A proposal to disinvest [a] 10% share in the HAL is under consideration of the government. However, a final decision will be taken after receipt of recommendations of the expert group constituted by the government for suggesting measures for strengthening and restructuring of the company,” Defense Minister A.K. Antony said in parliament on May 7.

If the government goes through with the off-loading of equity in HAL, it will become the third defense public sector undertaking after Bharat Electronics Limited (BEL) and BEML to be headed for disinvestment.

The defense minister gave his approval in principle last September to a proposal to divest a 10% stake in HAL over a five-year period to raise funds to modernize the company.

A 200 billion rupee modernization plan is in the works at HAL, which is set to take up foreign collaboration programs.

The government has also approved a 34% disinvestment in BEML and 25% in BEL.

HAL’s net profit after taxes in 2009-10 was 19.69 billion rupees ($372 million). In 2010-11 it was 21.14 billion rupees, and in 2011-12 the provisional figures was 23.70 billion rupees, the defense minister said.