Hindustan Copper sale price fixed at Rs 155/share; issue opens Friday
The government has set Rs 155 as the floor price for sale of four percent stake in Hindustan Copper (HCL), hoping to garner at least Rs 573.63 crore from the maiden disinvestment so far in the current fiscal.
New Delhi: Wooing investors with a 71 percent discount to market rate, the government Thursday announced a base price of Rs 155 a share for stake sale in Hindustan Copper, the maiden disinvestment in the current fiscal that can fetch up to Rs 1,376 crore to cash-pressed exchequer.
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 Friday 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 percent of its 99.59 percent stake in HCL, the offer size can go up to 9.59 percent if investors respond well.
HCL has kept 25 percent 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 percent 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 Friday 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 Thursday gaining over 11 percent at Rs 266.33 percent.
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 percent.
Other issues expected to hit the market in the near future are: NMDC and Oil India.