Govt offers HCL shares with big discount; issue opens tomorrow

The share of Hindustan Copper Ltd (HCL), a major PSU metal producer, closed the day at Rs 266.30 on BSE.

The HCL public offer opens tomorrow setting the tone for the government's disinvestment programme of Rs 30,000 crore which it aims to complete in less than five months of the current financial year.

"Government of India has informed BSE that the floor price for the sale shall be...Rs 155 per equity share of Hindustan Copper," the state-run firm said in an exchange filing.

Though the minimum target for the government is to divest four per cent of its 99.59 per cent stake in HCL, the offer size can go up to 9.59 per cent if investors respond well.

HCL has kept 25 per cent of the issue reserved for mutual funds and insurance companies.

"No single bidder other than mutual funds and insurance companies shall be allocated more than 25 per cent of the size of the sale," the company added.

The share sale would take place on the separate window of the stock exchanges -- BSE and NSE. It will start tomorrow at 9.15 am and close on the same day at 3.30 pm.

"HCL is a very illiquid stock and the current market price is not an indicator for anything. I think it is very mature and good thing. I expect it would be successful," said Sudip Bandhopadhyaya of Destimoney Securities.

The HCL share had a good run in the BSE today gaining over 11 per cent at Rs 266.33 per cent.

The HCL issue has high stakes for the government which wants to tap at least Rs 30,000 crore in the current fiscal year to meet its fiscal deficit of 5.3 per cent.

Other issues expected to hit the market in the near future are: NMDC and Oil India.