Hindustan Copper OFS: Govt To Sell Up To 6% Stake At Rs 514 Floor Price; Shares Fall Over 7%

Under the two-day OFS, the government is offering more than 5.80 crore shares, representing up to 6% of its stake in Hindustan Copper

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Hindustan Copper OFS.

The government’s offer-for-sale (OFS) in Hindustan Copper Ltd began on the stock exchanges on Tuesday, with institutional investors bidding for a stake of up to 6% in the state-owned copper producer. The share sale comes at a significant discount to the stock’s previous closing price and has weighed on the company’s shares.

Hindustan Copper shares fell sharply during Tuesday’s session. The stock was trading at around Rs 532.30, down Rs 41.85 or 7.29%, according to the market data shown above.

Under the two-day OFS, the government is offering more than 5.80 crore shares, representing up to 6% of its stake in Hindustan Copper, including a 3% greenshoe option. The floor price has been fixed at Rs 514 per share.

“Government of India offers to divest 3% equity in Hindustan Copper Limited (HCL) through an Offer for Sale (OFS), with an option to divest an additional 3% (green shoe) in case of oversubscription. The OFS will open at a floor price of Rs 514 per share. 10 percent of the offer is reserved for retail investors, with an additional 25,000 shares reserved for eligible employees,” the DIPAM secretary has said in a post on X.

At the floor price, the government could raise roughly Rs 3,000 crore from the stake sale if the entire offer, including the greenshoe portion, is subscribed and sold at the floor price.

Hindustan Copper OFS: Key Details

The OFS floor price of Rs 514 represents a discount of about 10.38% to Hindustan Copper’s Monday closing price of Rs 573.55 on the BSE. The discount is intended to make the offering attractive to investors, although the sharp decline in the stock on Tuesday has narrowed the gap between the market price and the OFS floor price.

The government currently owns 66.14% of Hindustan Copper. If the full 6% stake is sold, its holding in the company would fall further, supporting the Centre’s broader disinvestment programme.

Retail investors can bid on Wednesday

Institutional investors are eligible to participate in the first phase of the OFS on Tuesday, while the portion reserved for retail investors will open for bidding on Wednesday.

The OFS mechanism allows the government to sell shares directly through the stock exchanges without conducting a separate public issue. The final amount raised will depend on the demand and the price at which shares are allotted.

Govt disinvestment target

The Hindustan Copper stake sale is part of the government’s ongoing public-sector disinvestment programme. According to the figures provided, the Centre has already raised Rs 52,716 crore through PSU disinvestment in the current financial year.

The Hindustan Copper OFS is therefore significant not only for the company and its shareholders but also for the government’s efforts to generate resources through stake sales in public-sector enterprises.

For investors, the key factor to watch will be the level of institutional and retail participation in the OFS and whether the stock trades close to, or below, the Rs 514 floor price after the completion of the issue.

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Original source: https://www.news18.com/business/markets/