Hindustan Copper share sale garners full subscription

Centre will raise Rs 400 crore as part of disinvestment programme

The tow-day offer for sale (OFS) of Hindustan Copper garnered full subscription on Thursday, helping the government mop up Rs 400 crore as part of its 2016-17 disinvestment programme. The 64.76-million share sale has so far received bids for 80 million shares, according to data from the BSE.  

Most bids were received at the base price of Rs 62 per share. The Hindustan Copper stock on Thursday fell five per cent to end at Rs 62.1.

Sources said state-owned insurance companies and banks participated in the OFS. Around 13 million shares for retail investors (those investing less than Rs 2 lakh) will be auctioned on Friday. The government is offering an additional discount of five per cent to retail investors buying the OFS. In case the retail portion remains undersubscribed, the shares will be sold to investors who bid in the non-retail segment, which has seen 1.5 times more demand than the shares on offer.

Following the share sale, the government’s stake in the copper maker will fall to 82.95 per cent, from the current 89.95 per cent. The centre will have to pare its holding further to at least 75 per cent to achieve the 25 per cent public float requirement.

In the first half of the current financial year, the government has divested its holding in only two companies. In April, the government had raised Rs 2,716 crore by selling 11.3 per cent stake in NHPC. The total mobilisation has reached Rs 3,117 crore and the government is staring at a steep target in the second half.

The government has set the disinvestment target for 2016-17 at Rs 56,500 crore. Around Rs 36,000 crore will be raised through PSU disinvestments like NHPC and Hindustan Copper. The remaining amount will be raised through strategic sale.