Hindustan Copper OFS fully subscribed; govt raises Rs 260 cr

NEW DELHI: The government garnered nearly Rs 260 crore with the Hindustan Copper stake sale which was over-subscribed by 1.14 times of the shares on offer on Wednesday.

The issue attracted bids for over 4.23 crore shares, or 1.14 times, against 3.71 crore shares on offer even before the close of market hours (at 02:15 p.m.), according to data from stock exchanges.

The indicative price was Rs 70 apiece which was same as the floor price. At the indicative price, the stake sale would fetch the exchequer over Rs 260 crore.

Meanwhile, Hindustan Copper shares on the stock exchanges were trading 2.7 per cent lower at Rs 70.65 at 02:20 p.m. The stock had hit a low of Rs 70.55 and a high of Rs 71.70 in trade today.

The government of India which holds 94.01 per cent stake is divesting 37,119,152 shares or 4.01 per cent of equity capital in Hindustan Copper Ltd. (HCL) via offer-for-share ( OFS) route.

The stake sale would make the company complaint to the minimum 10 per cent public holding norm prescribed by the market regulator, Sebi.

The government plans to raise Rs 40,000 crore through disinvestment in 2013-14.

Earlier in the month of June, the government had raised Rs 568 crore through divesting 9.33 percent stake in MMTC.

Angel Broking recommended investors to ‘AVOID’ subscribing to HCL issue as valuation looks expensive compared to its peer group.

The stock is trading at 21.0x PE and 11.9x EV/EBITDA based on FY2012 numbers, which is expensive compared to its peers such as Coal India, MOIL and NMDC are trading in the range of 3-7x FY2012 EV/EBTIDA, said the report.