Hindustan Copper Govt OFS Closes With 726% Retail Subscription, Full Greenshoe Exercised

The central government's latest disinvestment move drew a strong response from retail investors on Wednesday, as the offer for sale (OFS) in Hindustan Copper closed with the retail portion subscribed 725.9 times, prompting the Centre to exercise its full oversubscription option and expand the total stake sale to 6% of the company.

The two-day OFS, conducted through the Ministry of Mines, was originally structured to divest up to 3% of Hindustan Copper's paid-up equity, comprising just over 2.9 crore shares, with an additional oversubscription option of a similar size built in. Strong demand from institutional investors on the first day of bidding prompted the government to exercise that option in full, lifting the total offer size to 5.8 crore equity shares, equivalent to 6% of the company.

Of the enlarged offer, roughly 58 lakh shares, or 10%, were set aside for retail investors, with a further 25,000 shares reserved for eligible employees who were permitted to bid for shares worth up to Rs 5 lakh. When bidding closed on Wednesday, the retail segment alone attracted bids for 4.21 crore shares against its quota, translating into subscription of nearly 726%, with all retail bids backed by full margin.

The non-retail tranche had already been fully covered a day earlier, with bids received for 8.91 crore shares against the revised non-retail allocation on the first day of the offer. Of those bids, a majority were backed by full margin, while a smaller portion came in without margin cover. The indicative clearing price for the OFS worked out to Rs 532.42 per share, a discount to where the stock has been trading in the secondary market.

Hindustan Copper, a central public sector undertaking under the Ministry of Mines, is engaged in the exploration, mining, smelting and refining of copper and copper ore in India. As of the end of March this year, the government held just over 66% of the company, meaning the OFS trims but does not materially dilute the Centre's controlling stake.

Investor appetite for the stock has been underpinned by a sharp improvement in its underlying financial performance. On a consolidated basis, Hindustan Copper's adjusted net profit rose more than 160% year-on-year in the June quarter, even as it declined from the preceding quarter, while net sales climbed over 80% year-on-year for the same period. Copper prices have also been firm through the year, adding to the appeal of a company with direct exposure to the metal's fortunes.

The stock itself reflected the enthusiasm around the offer, settling nearly 4.4% higher on the BSE at the close of trade on Wednesday, comfortably above the OFS clearing price. That performance suggests investors who participated in the retail tranche were, on paper at least, sitting on gains within hours of the offer closing.

The Hindustan Copper divestment forms part of the government's broader disinvestment programme for the current financial year, with the Centre continuing to lean on strong retail liquidity and firm commodity prices to meet its annual targets. With metal markets running hot and retail participation in public offers showing little sign of fatigue, the response to this OFS is likely to be read as an encouraging signal for further stake sales the government may look to bring to market in the coming months.

This article is an original editorial summary based on publicly reported information. It has been independently written for publication and does not reproduce content from any single source.