Cabinet to discuss Hindustan Copper divestment soon

Hindustan Copper Ltd’s follow-on public offer (FPO) could be one of the first public-sector companies’ to hit the markets next financial year. The Department of Disinvestment has prepared a Cabinet note for divestment in the public sector mining company and the sale of 20 per cent stake in it may come up for approval soon.

A finance ministry official confirmed to Business Standard: “There has been some movement on the disinvestment in Hindustan Copper.” It has proposed dilution of 10 per cent government equity in the company through offer for sale, while Hindustan Copper would raise fresh equity of the same quantity.

Public issues of Satluj Jal Vidyut Nigam and Engineers India Ltd, likely to be introduced in the April-June quarter next year, have already been approved by the Cabinet. Steel Authority of India Ltd, Coal India and Bharat Sanchar Nigam Ltd could be the next in line.

The mines ministry had cleared the proposal for Hindustan Copper’s FPO last month after the company’s board approved it in December 2009. The government currently holds 99.59 per cent in the company. Its stock on Monday closed 0.06 per cent, or 0.30 points, lower on the Bombay Stock Exchange, at Rs 529.25. The company is expecting to raise about Rs 5,000 crore through the FPO and the money raised through fresh equity would support its expansion plans.

The government is targetting around Rs 40,000 crore from divestment next year.