LIC picks up 2.74% stake in HCL's latest OFS

KOLKATA: Life Insurance Corporation (LIC) has picked up a 2.74% stake in Hindustan Copper (HCL) during the company's offer-for-sale (OFS) on July 3. The state-run insurer bought 25,389,351 shares in the country's only integrated copper producer, making an investment of 177.72 crore in the company's shares. Prior to it, LIC's share holding in HCL was 2.86%, or roughly around 26,504 360 shares. In the process, LIC's shareholding has crossed the 5% mark in HCL.

In a note issued to BSE on Monday, HCL informed the exchange that LIC's stake in the company has gone up to 5.6%, or around 51,893,711 shares.

The Government of India had divested 4.01% of its shareholding in HCL amounting to 37,119,152 shares of the company in the OFS, for which the floor price was set at 70 per share.

The government, which earlier held 99.5% stake in the company, had managed to raise funds through an offer-for-sale of some Rs 5.4 crore shares in the company in November 2012, or around 5.58% of the company's equity base. The latest round of disinvesment is thus likely to raise the public shareholding in the company to around 10%, in line with the regulatory norm for public sector companies.

India has a large imbalance between its copper refining and mining capacity. Domestic smelting/ refining capacity stands at one million tonne per annum (mtpa) for which 100 mt of copper ore is required (assuming 1% cu). Currently, India's actual copper ore production stands at 3.2 mtpa, which is entirely produced by HCL.