Hindustan Aeronautics Limited's (HAL) Rs 4,230 crore initial public offering (IPO) opened today, representing 10 per cent of the company, pegging its market cap at Rs 42,300 crore. India's largest aerospace company, which caters largely to the defence sector, is known more for its sluggish pace of design and manufacturing than for its cutting edge technology - an image it hopes to change.
The company, which is 100 per cent owned by the government, originated as Hindustan Aircraft on December 23, 1940, with the foundation stone for its first plant, at Bengaluru, laid the next day.
It was set up as a private sector enterprise by Walchand Hirachand Doshi, who also set up India's first shipyard and India's first car factory, which later on produced the Premier Padmini.Hindustan Aircraft was a joint venture between him and the Mysore government, then ruled as a princely state.
Hindustan Aircraft had an initial authorised capital of Rs 4 crore and a paid-up capital of Rs 40 lakh. Its authorised capital was later raised to Rs 600 crore, divided into 60 crore shares of face value of Rs 10 each.The company, which was set up in collaboration with Inter Continental Aircraft Company of USA, started production by manufacturing the Harlow Trainer, Curtiss Hawk Fighter and the Vultee Bomber Aircraft.
The then Government of India, run by the British, acquired 33.33 per cent stake in the company, just a few months after it broke ground for its factory and nationalised it a year later, in 1942 due to World War 2 - with its control passing to independent India's first government in 1947.In 1963, the government set up Aeronautics India Limited, to manufacture MiG 21 under licence - merging it with Hindustan Aircraft in 1964 to form Hindustan Aeronautics.
Declared a Navratna company in 2007, HAL has earned a well-deserved reputation for tardiness and quality defects in delivering its projects, with delays running into several years - sometimes even a decade.For instance, its export order of seven Dhruv light utility helicopters, bagged in 2008, to the Ecuadorian air force was cancelled by the Ecuador government after four of the seven delivered choppers crashed - along with a delay that saw HAL being slapped with a fine.