Disclosure issues keep FPIs at bay from HAL, Bharat Dynamics IPOs

Registration with US SEC, or compliance with "Rule 144A" of Securities Act pose hurdles; both issuances barely make it with LIC support

Defence public sector undertakings Hindustan Aeronautics (HAL) and Bharat Dynamics (BDL) decision to withhold material information from public shareholders is the key reason for tepid demand for their shares, particularly from overseas investors.

Several institutional investors were left ineligible from investing in these companies as they fail to meet the disclosure norms. Several big-ticket foreign portfolio investors (FPIs) had to stay away from participating in these IPOs despite attractive prospects, say bankers.

Both the issuances failed to garner any applications from FPIs and barely scraped through with the support of state-owned institutional investors such as Life Insurance Corporation (LIC).

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