Hindustan Copper declines as OFS for selling govt's stake commences

Hindustan Copper fell 3.83% to Rs 62.85 at 11:19 IST on BSE as the offer for sale by the Government of India to sell a 7% stake in the company through the stock exchanges mechanism began at 9:15 IST today, 29 September 2016.

The announcement was made after market hours yesterday, 28 September 2016.

Meanwhile, the BSE Sensex was up 71.68 points, or 0.25%, to 28,364.49.

On BSE, so far 1.37 lakh shares were traded in the counter, compared with average daily volume of 1.76 lakh shares in the past one quarter. The stock hit a high of Rs 63.40 and a low of Rs 62.50 so far during the day. The stock hit a 52-week high of Rs 73.60 on 22 August 2016. The stock hit a 52-week low of Rs 42.30 on 19 February 2016. The stock had underperformed the market over the past 30 days till 28 September 2016, rising 0.15% compared with 0.18% rise in the Sensex. The scrip had, however, outperformed the market in past one quarter, rising 22.72% as against Sensex's 4.79% rise.

The mid-cap company has equity capital of Rs 462.61 crore. Face value per share is Rs 5.

The government is offering a 7% stake in the company through a two-day offer for sale (OFS) beginning today, 29 September 2016. The government has set a floor price of Rs 62 per share, a 5.12% discount to the stock's Wednesday's closing share price of Rs 65.35 on BSE.

While the trading window is open for non-institutional investors today, 29 September 2016, retail investors can subscribe tomorrow, 30 September 2016. Retail investors will be allocated shares at a 5% discount to the cut-off price, the company said.

As at 11:15 IST, the OFS received bids for a total of 1.75 crore shares from non-retail investors as against 5.18 crore shares on offer for this category of investors.

The OFS, comprising 6.47 crore shares, will help the government raise Rs 401.54 crore. The government's stake will decline to 82.95% following the sale. The Government of India holds 89.95% stake in Hindustan Copper (as per shareholding pattern as on 30 June 2016).

Hindustan Copper reported net loss of Rs 2.88 crore in Q1 June 2016 as against net profit of Rs 20 crore in Q1 June 2015. Net sales declined 12.2% to Rs 205.99 crore in Q1 June 2016 over Q1 June 2015.

Hindustan Copper is a vertically integrated copper producing company encompassing mining, beneficiation, smelting, refining and casting of refined copper metal.

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