Mumbai: India’s largest domestic investor Life Insurance Corporation of India has once again come to government’s rescue by subscribing 70% of Hindustan Aeronautics’ Rs 4,200-crore initial public offering.
“LIC has invested Rs 2,900 crore in Hindustan Aeronautics IPO,” said a source close to the development.
The issue is part of the government’s 2017-18 divestment plan. The company had set a price band of Rs 1,215 to Rs 1,240 per share. SBI Capital and Axis Capital were the lead managers to the issue.
The issue was subscribed 0.99 times, with demand coming mainly from qualified institutional buyers’ segment especially domestic. The retail and high net-worth individual categories were undersubscribed. The offer had got bids for 3.37 crore shares against a total issue size of 3.41 crore shares on offer and portion reserved for QIBs was subscribed 1.7 times while HNIs was subscribed 0.03 times. The retail portion was subscribed 0.4 times. The retail category was offered a discount of Rs 25 per share. The employee category was subscribed 0.2 times.
Stock brokers had recommended long-term subscribe on the stock. Hindustan Aeronautics designs and manufactures a range of products including aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures, primarily for the Indian armed forces.
However, brokers said that the reason for lower subscription was market volatility.