Hindustan Aeronautics Limited (HAL), a defence public sector undertaking, has made its debut on the bourses at a 3.8 per cent discount to the issue price of Rs 1,215. On National Stock Exchange (NSE), the stock got listed at Rs 1,152, down by 5.19 per cent.
The company came out with an initial public offering (IPO) of Rs 4,200 crore, which was open from March 16 to March 20. The price band for the offer was fixed at Rs 1,215-1240. The issue is part of the government’s 2017-18 divestment plan. The IPO, however, got subscribed 99 per cent after Life Insurance Corporation of India (LIC) came to its rescue by investing Rs 2,900 crore, which is 70% of the IPO size.
Overall, qualified institutional buyer’s (QIBs) portion was oversubscribed to 1.73 times while the non-institutional investors’ portion was subscribed 3 per cent and retail investors portion were subscribed 39 per cent.
According to a report by SMC Reserach, the company’s order book as on December 31, 2017 stands at Rs 68,461 crore, which includes products and services to be manufactured and delivered and excludes anticipated revenues from their joint ventures and subsidiaries.
The report also states that considering the P/E valuation on the upper price band of Rs.1240 EPS and P/E of FY2017 are Rs78.49 and 15.80 multiple respectively and at a lower price band of Rs 1215, P/E multiple is 15.48.
Looking at the P/B ratio on the upper price band of Rs1240, book value and P/B of FY17 are Rs387.08 and 3.20 multiple respectively and at a lower price band of Rs 1215 P/B multiple is 3.14. No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.
HAL is into the design, development, manufacture, overhaul, repair, upgrade and servicing of a wide range of products including, aircraft, helicopters, accessories aero-engines, avionics, and aerospace structures. The company provides support for maintenance, repair and overhaul for indigenous and licence manufactured aircraft and helicopters, as well as for aircraft and helicopters procured directly by the Indian Defence Services. It is the 39th largest aerospace company in the world in terms of revenue.