Hindustan Copper cracks 7% as govt OFS opens; floor price at 10% discount

Hindustan Copper OFS: The government has fixed the floor price of ₹514 a share, implying a discount of 10.4 per cent from the previous close of ₹574.15 on the NSE.

Hindustan Copper shares dropped 7 per cent in trade on Tuesday morning as the government announced to sell up to 6 per cent stake through an offer for sale (OFS). 

 

The government has fixed the floor price of ₹514 a share, implying a discount of 10.4 per cent from the previous close of ₹574.15 on the NSE.  The offer opened for non-retail investors today, while retail investors can bid on August 26 (Wednesday).

 

The stock opened sharply lower at ₹542 and touched a low of ₹534.20. As of 9:50 AM, the PSU stock traded 6.8 per cent lower at ₹535, with nearly 13 million equities changing hands.  In comparison, the benchmark Nifty 50 index was down 0.33 per cent at 24,140.    Hindustan Copper OFS: Govt to sell up to 6% stake

 

 

According to Arunish Chawla, secretary, Department of Investment and Public Asset Management (DIPAM), the government will divest 3 per cent equity in Hindustan Copper through an OFS, with an option to divest an additional 3 per cent (green shoe) in case of oversubscription.

 

Chawla said that 10 per cent of the offer is reserved for retail investors, with an additional 25,000 shares set aside for eligible employees.  The sale of 6 per cent stake in Hindustan Copper could fetch the government ₹3,000 crore.  Hindustan Copper OFS: Should you participate?  

Gaurav Sharma, vice president & HoR, Globe Capital, said that he is bullish on Hindustan Copper and other metal stocks. He said that retail investors may consider participating in the OFS as the offer price is at a significant discount and provides an attractive entry opportunity.

 

"From a long-term perspective, we believe investors should continue to hold Hindustan Copper. The initial decline following the OFS announcement is a welcome move, as it provides an opportunity for new investors to enter the stock and for existing investors to add more," he said.

 

So far in the current fiscal year, the government has mopped up ₹52,716 crore through PSU disinvestment.

 

Hindustan Copper Limited, a Miniratna PSU under the Ministry of Mines, is engaged in mining, production, processing, and marketing of copper and related products. 

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