According to Calcalist reporting, IAI has approximately six weeks to resolve a standoff over how it discloses classified activities to investors — or risk being forced to redeem its sole outstanding bond series, worth NIS 154 million ($50 million), potentially stripping the company of its status as a publicly reporting corporation. The planned IPO targets a valuation of approximately NIS 100 billion ($33 billion), with IAI intending to sell at least 20% of its shares to institutional investors.
A Regulatory Logjam With a Hard Deadline
Deputy Attorney General Gil Limon recently informed both the Government Companies Authority and IAI that the necessary milestones had not been met, and that the matter was not yet ready for consideration by Attorney General Gali Baharav-Miara. No decision has been made on whether to advance it in the days before next week’s Knesset elections. Limon has requested an opinion from Israel Securities Authority Chairman Seffy Zinger on the confidentiality order and IAI’s compensatory disclosure obligations — mechanisms designed to provide investors with substitute information in place of data the company is prohibited from revealing for security reasons.
In recent weeks, IAI and the Government Companies Authority have reached an understanding with the Israel Securities Authority, in coordination with the Director of Security of the Defense Establishment (Malmab), on how to regulate confidentiality and compensatory disclosure. The remaining steps are described as largely formal, but the approaching maturity of IAI’s bonds — in about six weeks — has made the timetable critical. Calcalist reports that IAI executives are considering an urgent court petition to accelerate a resolution and preserve the company’s reporting-corporation status. Sources involved in the discussions said the Israel Securities Authority may have to grant an exceptional extension, similar to one it provided to IAI in the past. Senior officials warned that losing reporting-corporation status would impair IAI’s ability to operate in the capital market and raise funds, weaken corporate governance and transparency, and damage its standing with investors and business partners in Israel and abroad. One source warned that the delay could “set the company back decades.”
In the first half of 2026, the company’s sales reached $4.27 billion, up 33% from the same period in 2025. Net profit rose 40% to $450 million, while its order backlog increased 30% to a record of approximately $35 billion. IAI has held a single series of bonds traded on the Tel Aviv Stock Exchange for approximately two decades, benefiting from an exemption granted by the Israel Securities Authority from disclosing information about its classified defense activities, which include the production of Arrow 3 missile-defense systems used to intercept ballistic missiles.
The planned offering is intended to strengthen IAI’s ability to compete in the global defense market, facilitate acquisitions in Israel and abroad, and allow the company to offer more competitive compensation to employees and executives. One factor accelerating the push, according to Calcalist, is the rise of defense tech companies that have benefited from growing global defense budgets and greater access to private investment, and that are competing with established contractors for skilled personnel. The Government Companies Authority, IAI Chairman Boaz Levy, and the company’s CEO all view the offering as an important tool for strengthening IAI’s position in international markets.