State-run defense equipment maker Bharat Dynamics Ltd and Indian Renewable Energy Development Agency Ltd, which finances green energy projects, have received regulatory approvals to float IPOs.
BDL and IREDA received Securities and Exchange Board of India (SEBI)’s final observations on 15 and 16 February, respectively, according to SEBI’s website. With this, five companies have received SEBI’s clearance on IPOs this calendar.
As many as 46 firms had received clearance for IPOs in 2017, according to SEBI’s website.
BDL had filed its IPO on 22 January, proposing to raise an estimated Rs 1,000 crore.
The public issue entirely comprises a secondary market sale. The government, acting as the promoter with 100% ownership, will sell a little over 22 million shares representing about 12.5-13% stake in the company on a post-issue basis.
The government will get three years from the date of listing to bring its stake down to 75% or below to meet SEBI’s norms on the minimum public float.
BDL will join other PSU defence and defence-related companies in opting for the capital markets route.
Hindustan Aeronautics Ltd (HAL) filed its draft proposal with SEBI in October 2017 after moving back and forth on its plans for five years.
Another state-owned firm, Mishra Dhatu Nigam Ltd (Midhani) had filed for a Rs 450 crore IPO last month. The company makes special steels and superalloys, besides being the only manufacturer of titanium alloys in India. Its products have special applications in sectors such as defence, aerospace, power generation, nuclear and other general engineering industries.
IREDA had filed its draft proposal on 21 December last year. Its public issue comprises a fresh issue of 139 million shares. The IPO size is estimated to be Rs 850-900 crore ($133-140 million), according to people in the know.
More than two dozen firms, which either have a valid SEBI approval or have filed applications to receive one, are looking to go for IPOs. These firms are looking to benefit from the boom in the equity markets.
PSU offerings are part of the government’s record disinvestment target of Rs 80,000 crore in the forthcoming financial year.
The government has raised Rs 92,476 crore through disinvestment in the current financial year so far, higher than the Rs 72,500 crore target set for the year. However, more than a third of that amount, or Rs 36,9015 crore, came from a sale of stake in state-run refiner Hindustan Petroleum Corp Ltd to state-run explorer Oil and Natural Gas Corp.