Indian govt proposes to sell up to 3.5% stake in defence firm HAL

BENGALURU, March 22 (Reuters) – India is planning to sell up to 3.5% stake in aerospace and defence company Hindustan Aeronautics Ltd (HIAE.NS) this week in a deal that could fetch the government 28.67 billion rupees ($347.16 million), an exchange filing showed on Wednesday.

So far, the government has mopped up 311.1 billion rupees by selling its shares in state-run firms as against its target of 500 billion rupees for the financial year ending March 31.

The Indian government stares at missing its divestment target for 2022/23 as it plans to put on hold the part sale of its stake in Hindustan Zinc (HZL) unless the company calls off the nearly $3 billion cash acquisition of two Vedanta Group subsidiaries.

The floor price for the HAL stake sale is set at 2,450 rupees apiece, at a discount of 6.7% to Wednesday’s close.

The government owns a 75.15% stake in HAL, according to Refinitiv Eikon.

The government plans to sell a 1.75% stake on March 23-24, and has the option to sell 1.75% more stake if needed.

Divestments in state-owned firms is a key revenue-raising measure that helps government to spend on infrastructure-building.

($1 = 82.6100 Indian rupees)

Reporting by Nallur Sethuraman and Chris Thomas in Bengaluru and Nikunj Ohri in NEw Delhi; Editing by Shinjini Ganguli and Maju Samuel

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