HAL Increases Capital to Rs 700 Crore and Declares Rs 13 per Share Dividend

Hindustan Aeronautics Limited (HAL), India's premier aerospace and defence company, has taken significant steps to fortify its financial framework and enhance shareholder value. In a board meeting held recently, HAL decided to increase its authorized share capital from Rs 600 crore to Rs 700 crore. This move is aimed at supporting the company's future growth and development initiatives.

The decision to raise the authorized capital underscores HAL's commitment to expanding its operations and capabilities. The increased capital will provide the company with greater financial flexibility to invest in new projects and technologies, ensuring it remains at the forefront of India's defence and aerospace sectors.

In addition to the capital increase, HAL's board has proposed a final dividend of Rs 13 per equity share, each with a face value of Rs 5. This represents a substantial 260 percent payout for the financial year 2023-24, highlighting HAL's robust financial performance and its commitment to rewarding shareholders. The dividend will be distributed to eligible shareholders within 30 days of approval at the Annual General Meeting (AGM), with the record date for determining eligibility set for August 21, 2024.

These decisions are aligned with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and will be presented for shareholder approval at the upcoming AGM. The alteration of the capital clause in the company’s Memorandum of Association will also be subject to shareholder approval.

In a notable development earlier this month, HAL announced that the Ministry of Defence had issued a Request for Proposal (RFP) for the procurement of 156 Light Combat Helicopters (LCH), also known as the Prachand. This significant deal, valued at over Rs 45,000 crore, includes 90 helicopters for the Indian Army and 66 for the Indian Air Force. The Prachand is lauded for its capability to operate in high-altitude areas like the Siachen Glacier and Eastern Ladakh. It is the only attack helicopter in the world that can land and take off at an altitude of 5,000 meters (16,400 feet).

Equipped to fire a range of air-to-ground and air-to-air missiles, the Prachand is designed to neutralize enemy air defence systems, making it a critical asset for India's military operations. This procurement is a testament to the government's commitment to boosting self-reliance in defence manufacturing under the Make in India initiative, part of the broader Atmanirbhar Bharat vision.

The emphasis on indigenous production is further evident as the Defence Ministry has also issued a tender to HAL in April this year for 97 LCA Mark 1A fighter jets, a contract valued at over Rs 65,000 crore. These initiatives highlight the government's strategy to reduce dependency on foreign defence equipment and bolster domestic manufacturing capabilities.

Overall, HAL's strategic financial decisions, coupled with significant defence contracts, position the company for sustained growth and development. The increase in authorized capital and the substantial dividend payout reflect HAL's strong financial health and its ongoing commitment to enhancing shareholder value while contributing to India's defence preparedness and self-reliance.