Hindustan Copper Share Price Falls 7% After Government Announces 6% OFS at ₹514; What Investors Should Know

Shares of Hindustan Copper Limited came under heavy selling pressure on Tuesday, August 25, falling more than 6% in early trade after the Government of India announced plans to sell up to a 6% stake in the state-owned copper producer through an Offer for Sale (OFS).

By around noon, Hindustan Copper shares were trading at ₹532.35 on the NSE, down 7.28%. The stock had closed at ₹574.15 on Monday.

Government Sets ₹514 Floor Price for Hindustan Copper OFS

The government will initially offer a 3% stake in Hindustan Copper through the OFS, with an additional 3% green-shoe option available if the issue receives strong demand.

The floor price has been fixed at ₹514 per share. This represents a discount of around 10.5% to Hindustan Copper's previous closing price.

The Department of Investment and Public Asset Management (DIPAM) said the government is offering the shares as part of its ongoing PSU disinvestment programme.

Retail Investors Get 10% Reservation

The OFS includes provisions for retail investors and eligible employees. Around 10% of the offer size will be reserved for retail investors, while 25,000 shares have been earmarked for eligible employees.

The government has already raised ₹52,716 crore through PSU disinvestment during the current financial year.

When Will Hindustan Copper OFS Bidding Take Place?

Non-retail investors will be able to participate in the OFS on August 25, while retail investors and eligible employees can place their bids on August 26.

Non-retail investors who want to carry forward their unallotted bids from the first day will also be allowed to participate on the second day.

Bidding will take place on the NSE between 9:15 AM and 3:30 PM on both days. Settlement for bids received on both days is scheduled for August 27 because of a clearing holiday on August 26.

Who Is Handling the Hindustan Copper OFS?

Emkay Global Financial Services, DAM Capital Advisors and IDBI Capital Market Services are acting as brokers for the government. DAM Capital is the settlement broker.

The NSE has been designated as the exchange for the transaction, while NSE Clearing will handle the clearing process.

Why Are Hindustan Copper Shares Falling?

The sharp decline in the stock comes as investors assess the government's stake sale at a price significantly below the prevailing market price.

The ₹514 floor price offers a substantial discount to the stock's previous closing price of ₹574.15. Such an OFS can put short-term pressure on the share price as investors adjust their expectations around the additional supply of shares in the market.

However, the long-term outlook will also depend on Hindustan Copper's operating performance, copper prices and the company's expansion plans.

Hindustan Copper OFS: Key Points for Investors

Company: Hindustan Copper Limited

OFS: 3% stake initially

Green-shoe option: Additional 3%

Maximum stake sale: Up to 6%

OFS floor price: ₹514 per share

Previous closing price: ₹574.15

Retail reservation: 10%

Employee reservation: 25,000 shares

Non-retail bidding: August 25

Retail bidding: August 26

Settlement: August 27

The government stake sale is likely to remain a key trigger for Hindustan Copper shares in the near term, while investors will closely watch demand during the two-day OFS and the stock's movement after the issue is completed.