The Government has managed to divest 4 per cent stake in Hindustan Copper through the offer-for-sale route. Against an offer of 3.70 crore shares, it received bids for 5.16 crore shares.
Till 3-25 p.m., 3.4 crore shares were bid for. Thanks to the last-minute aggressive bidding for about 50 lakh shares, the issue sailed through, by 3-30 p.m. However, at 4 p.m., according to BSE/NSE Web sites, bids for 5.16 crore shares had been received, at an indicative price of Rs 156.56.
The Finance Ministry said the gross receipts from the issue are Rs 800 crore. According to the Ministry’s statement, about 5.5 per cent of the total paid-up share capital of Hindustan Copper stands divested through today’s offer-for-sale.
Had the issue received a stronger response with bids for the remaining 3.71 crore shares under the greenshoe option, the Centre would have raised over Rs 1,300 crore.
The Government, which intended to sell 8.87 crore shares (with the greenshoe option), kept the floor price at Rs 155, at a huge discount of 42 per cent to Thursday’s closing price.
The steep discount led to a sharp fall in the share price in the secondary market on Friday. Hindustan Copper shares closed at Rs 213.05 a piece, down 20 per cent over the previous day’s close.
The Centre had earlier planned to divest its stake in Hindustan Copper in two phases. In the first phase, it decided to offload 4 per cent, while 5.59 per cent was to be divested in the second.
With the Government failing to get an overwhelming response, one has to wait and see when the second phase will kick in and at what price.
Meanwhile, Finance Minister P. Chidambaram said: “Issue has been fully subscribed. This shows resumption of disinvestment. We will go by as approved by the CCEA. I hope we can collect the target of Rs 30,000 crore”.