HAL-GE Negotiations Hit Roadblock Over F-414 Engine Deal

Discussions between Hindustan Aeronautics Ltd (HAL) and General Electric (GE) regarding the production of F-414 engines in India have encountered a significant hurdle, with GE reportedly demanding an additional $50 million to proceed with the deal, as per sources from IDRW.

Increase in Scope of Transfer of Technology

The proposed agreement involves licensing key components of the F-414 engine, covering 80% of the engine’s total value.

This marks a 22% increase in the scope of the Transfer of Technology (ToT) compared to a similar agreement made in 2012. The ToT expansion is expected to increase the overall value of the deal.

Estimated Deal Value and Negotiations

The deal, which is estimated to be worth around $1 billion at 2023 price levels, would see HAL manufacturing critical components for the F-414 engine in India.

According to earlier reports, HAL formed a Contract Negotiation Committee (CNC) to manage the discussions with GE. Negotiations officially began on December 3, 2024.

Technical Documents Under Review

HAL has requested GE to provide specific technical documentation to assess the depth and feasibility of the proposed ToT. Despite ongoing talks, no final agreement has been reached as both parties continue to negotiate the terms of the deal.

Stock Performance 

On January 21, 2025, HAL share price traded down by 1.98% at 12:24 PM (IST) at ₹4,105. HAL’s share price reached a 52-week high of ₹5,675 on July 09, 2024, and a 52-week low of ₹2,817.65 on January 24, 2024. As per BSE, the total traded volume for the stock stood at 1.02 lakh shares with a turnover of ₹42.09 crore.

At the current price, HAL shares are trading at a price-to-earnings (P/E) ratio of 33.06x, based on its trailing 12-month earnings per share (EPS) of ₹126.67, and a price-to-book (P/B) ratio of 9.64, according to exchange data.

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