Hindustan Copper OFS: Government to sell up to 6% stake at ₹514 per share, 10% below market price

The Indian government has announced its second offer for sale (OFS) this month, this time in Hindustan Copper, the state-run company engaged in copper ore mining and production. The government is looking to sell up to a 6% stake in the company through the OFS at a floor price of ₹514 per share.

The floor price represents a 10.45% discount to Hindustan Copper's closing price of ₹574 on the NSE on Monday. The OFS announcement comes at a time when the stock has staged a strong recovery in August, surging 17% and marking its biggest monthly gain since January.

Considering the floor price, the proposed 6% stake sale is valued at around ₹3000 crore, according to Mint calculations.

In a post on X, Department of Investment and Public Asset Management (DIPAM) secretary Arunish Chawla said the Government of India offers to divest 3 per cent equity in Hindustan Copper Limited (HCL) through an Offer for Sale (OFS) with an option to divest an additional 3 per cent (green shoe) in case of oversubscription.

The sharp rally has been driven by a spike in global copper prices amid concerns over the availability of the metal. The supply concerns were fuelled partly by a surge in copper shipments to the US in anticipation of a potential decision on import tariffs.

According to Chawla, 10 per cent of the offer is reserved for retail investors, with an additional 25,000 shares set aside for eligible employees. So far in the current fiscal, the government has mopped up ₹52,716 crore through PSU disinvestment.

Earlier this month, the government has raised ₹31,552 crore through the Offer for Sale (OFS) in Life Insurance Corporation of India (LIC). The disinvestment was aimed at helping LIC meet the minimum public shareholding (MPS) norms prescribed for listed companies.

Hindustan Copper shareholding

According to the BSE shareholding data, the Indian government remained the largest shareholder in Hindustan Copper, holding a 66.14% stake in the company at the end of the June-ended quarter. The proposed OFS could reduce the government's holding, depending on the final extent of the stake sale.

Retail shareholders form the second-largest shareholder category, collectively holding a 23.1% stake in the state-run metal company. Meanwhile, mutual funds have a relatively modest presence, with around 1% ownership in Hindustan Copper.

The shareholding data further shows that more than 12 crore individual shareholders with a share capital of up to ₹2 lakh collectively held a 17.79% stake in the company at the end of the June quarter, highlighting strong retail participation in the stock.

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