Indian Government To Sell 10 Percent of HAL

The Indian government has decided to sell 10 percent of its stake in Hindustan Aeronautics Ltd. (HAL).

With the proposed 10 percent equity sale, HAL shares will be listed on the Indian stock markets for the first time. The listing of HAL will not affect ownership, as the Indian government still will hold nearly 90 percent of the shares. But the board of directors would gain members from outside the government and bureaucracy.

The partial stake sale of HAL is likely to be increased in coming years, but the government is unlikely to shed its control, a Defence Ministry official said.

Currently, the other state-owned defense units whose shares had been sold to the public include Bharat Electronics and Bharat Earth Movers.

HAL has annual sales of about $3 billion and orders worth $10 billion in hand. HAL's hands are full as the license producer of the Russian Sukhoi, the British Hawk and the selected multirole fighter. In addition, HAL is the sole manufacturer of helicopters, aircraft and UAVs, and is developing the light utility helicopter and Light Combat Aircraft.

HAL was formed in 1964 with the merger of Hindustan Aircraft with Aeronautics India and Aircraft Manufacturing Depot. The company has 19 production units and 10 research and design centers spread across eight locations.

HAL is also the lead agency for the license production of Medium Multirole Combat Aircraft program, in which the Dassault Rafale and the Eurofighter are in final competition. After the selection, the fighter will be license-produced at HAL facilities.

Indian Air Force sources said they are not convinced HAL will be able to absorb the technologies involved in the license-production of either advanced fighter.

There also had been problems in the license-production of the British Hawk at HAL facilities, Air Force sources added.

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