HAL makes a muted debut

The IPO of PSU Hindustan Aeronautics had a very poor response; it was LIC which bailed out the IPO by subscribing to 70% of the issue size. It was allotted 2.34 crore shares or around 7% stake for Rs 2,844 crore. The IPO had aimed to raise Rs.4200 crore and it managed to garner Rs.4088 crore.

The QIB portion, thanks to LIC was 1.73 times while NII portion was subscribed just 3% and retail investors was better at 39%.

Thus in the background, no one has really expected a spectacular debut from HAL on the bourses today. The stock got listed on the BSE at Rs.1169, a discount of almost 4% over IPO price of Rs.1215.

In our New Issue Analysis, we had said, “Subdued secondary market conditions may not yield a pop on listing, but the share can be a good long term bet, as a quality portfolio stock. Hence, one can subscribe to the IPO with a long term view!”