Foreign investment banks, including Goldman Sachs, have opted out of the mandate to handle the share sale of the country's largest defence public sector undertaking (PSU) Hindustan Aeronautics (HAL). Inordinate delay and potential losses due to the zero-fee mandate are the reasons for behind foreign banks losing interest in the initial public offering (IPO), sources say.

The IPO, which opens later this week, was initially slated for 2014-15. In 2013, the department of disinvestment, now rechristened department of investment and public asset management (Dipam), had awarded HAL IPO mandate ...