The Indian government has approved a proposal to sell a 10% stake in state-owned aerospace firm . (HAL), a senior minister says.
“The government is aiming to sell HAL’s shares through an initial public offering,” Finance Minister P. Chidambaram said Nov. 8. The sale is expected to take place in the next fiscal year, which begins April 1.
The government hopes to earn 25 billion rupees ($460 million) from the sale.
The Bengaluru-based firm, which manufactures and assembles aircraft, is currently handling several crucial projects for the(IAF), including development of the Tejas light combat aircraft, Dhruv advanced light helicopters and indigenous production of Russian-origin Su-30MKI fighter aircraft.
HAL also is preparing to manage other key projects such as the production of the Medium Multi-Role Combat Aircraft, Fifth-Generation Fighter Aircraft, light utility helicopters and multi-role transport aircraft.
The IAF has been dissatisfied with HAL for not sticking to delivery schedules.
The company has not been able to meet IAF’s expectations because it is handling so many programs, a defense ministry official says. “The multiplicity of programs is to be blamed, not a lack of competence or facilities,” he says.
The government plans to spend nearly 200 billion rupees over the next five years to modernize HAL facilities and set up an expert panel to restructure the company.
The official says the sale could help reduce the government’s burden in HAL’s modernization, which includes plans to establish new multibillion dollar programs with foreign collaboration.
HAL is India’s third public sector defense firm to decide to sell stakes, along with Bharat Electronics Limited and BEML.