Hindustan Copper slips after government sets OFS floor price at discount

Meanwhile, the S&P BSE Sensex was down 210.56 points, or 1.08%, to 19,253.26.

On BSE, 77,000 shares were traded in the counter as against an average daily volume of 1.71 lakh shares in the past one quarter.

The stock hit a high of Rs 71.70 and a low of Rs 70.70 so far during the day. The stock had hit a 52-week low of Rs 65 on 2 July 2013. The stock had hit a 52-week high of Rs 310.90 on 17 September 2012.

The stock had underperformed the market over the past one month till 2 July 2013, sliding 24.16% compared with the Sensex's 1.50% fall. The scrip had also underperformed the market in past one quarter, falling 31.14% as against Sensex's 2.22% rise.

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

The government has set floor price of Rs 70 for the offer for sale (OFS), a 3.78% discount to Hindustan Copper's closing price on BSE on Tuesday, 2 July 2013. The government has decided to sell 3.71 crore shares constituting 4.01% stake in Hindustan Copper via OFS today, 3 July 2013. Shares of Hindustan Copper lost 6.62% to settle at Rs 72.65 on Tuesday, 2 July 2013.

The government currently holds 94.01% in Hindustan Copper. The stake-sale will make the company compliant with the minimum 10% public holding norm of market regulator Sebi. Sebi has mandated minimum public shareholding of 10% for state-run firms by 8 August 2013.

In November 2012, the government raised Rs 800 crore by divesting 5.16 crore shares, or 5.58% of the total paid up share capital of HCL, through the OFS route. The floor price for this OFS was fixed at Rs 155 per share.

In September 2012, the Cabinet Committee on Economic Affairs (CCEA) had approved 9.5% stake sale of HCL. The government had then decided to go ahead with only one tranche of the issue.

Hindustan Copper's net profit surged 36.9% to Rs 188.09 crore on 29.2% decline in net sales to Rs 414.68 crore in Q4 March 2013 over Q4 March 2012.

Hindustan Copper has the distinction of being India's only vertically integrated copper producing company encompassing mining, beneficiation, smelting, refining and casting of refined copper metal. The Government of India holds 94.01% stake in Hindustan Copper (as per the shareholding pattern as on 31 March 2013).

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