HAL IPO Analysis: Clear skies ahead for this public-sector defence major

A strong order book and an equally robust product pipeline offers revenue visibility

India’s largest defence public-sector company Hindustan Aeronautics (HAL) has many things going for it. The maker of the indigenous light combat aircraft or the Tejas will be the biggest beneficiary of rising defence budgets and the ‘Make in India’ programme, as 60 per cent of India’s defence-related requirements are currently met through imports. With the defence acquisition council clearing capital acquisitions to the tune of Rs 820 billion, the company’s products, which range from light combat aircraft to helicopters and trainers, stand to benefit.

The company, which gets revenues from products and services, has a hefty order book of Rs