Hindustan Copper share sale commences on bourses; shares fall 3%

Govt had cleared the 4.01% stake sale yesterday at a base price of Rs 70/share

Shares of Hindustan Copper today fell as much as 3% in the morning trade as the government's 4.01% share sale commenced on bourses.

The scrip touched a low of Rs 70.70 in the opening trade, 2.68% lower than previous close on the BSE.

After the close of market hours yesterday, a government panel had cleared the 4.01% stake sale in Hindustan Copper Ltd (HCL) at a base price of Rs 70 a share.

The base price was at a discount of 3.65% over the closing price of Rs 72.65 apiece.

On the National Stock Exchange, HCL scrip hit a low of Rs 70.65, down 2.35% over previous close.

Over three lakh shares of HCL changed hands on both BSE and NSE in the early hours of trade today.

The government holds 94.01% stake in HCL. The stake sale would make the company compliant to the minimum 10% public holding norm of market regulator Sebi.

The sale of 4.01% stake, or over 3.71 crore shares, through offer for sale (OFS) route at Rs 70 per share will fetch around Rs 260 crore to the exchequer.

Axis Capital, ICICI Securities, Kotak Securities, SBICAP Securities and UBS Securities India are acting as brokers for the share sale.

The government had in November last year sold 5.58% stake in HCL through OFS route at an average price of Rs 156.56 apiece.

The stake sale fetched Rs 808 crore to the exchequer.

In September, 2012, the Cabinet had approved 9.5% stake sale of HCL. The government had then decided to go ahead with only one tranche of the issue and get a good price from the auction.

HCL is the second PSU to hit the markets in the current fiscal. Last month, the government had raised Rs 568 crore through divesting 9.33% stake in MMTC.

The government plans to raise Rs 40,000 crore through disinvestment in 2013-14.