Hindustan Copper OFS: Govt to divest 3% stake with greenshoe option

The Indian government plans to sell a 3% stake in Hindustan Copper Ltd (HCL) through an Offer for Sale (OFS) at a floor price of Rs 514 per share. The offer includes an option to sell an additional 3% in case of oversubscription.

The Government of India has proposed to sell a 3 per cent stake in Hindustan Copper Limited (HCL) through an Offer for Sale (OFS), with the possibility of increasing the sale by another 3 per cent if the issue is oversubscribed, according to a social media post by the DIPAM Secretary.

OFS Details and Pricing

The government has fixed a floor price of Rs 514 per share for the OFS. At this price, the offer is Rs 53 below Hindustan Copper's closing price of Rs 567 per share on the National Stock Exchange on Friday. The floor price is around 9.3 per cent lower than the Friday closing price.

DIPAM Secretary stated, "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".

Reservations for Investors and Employees

Of the shares being offered, 10 per cent will be set aside for retail investors. The government has also earmarked an additional 25,000 shares for eligible employees.

The initial offer covers a 3 per cent equity stake in Hindustan Copper. However, the government has retained a green-shoe option that could allow it to sell a further 3 per cent stake if the OFS attracts demand beyond the shares available under the initial offer.

In an OFS, a green-shoe option refers to the provision allowing the seller to offer additional shares when the initial offer is oversubscribed. In the case of Hindustan Copper, the additional portion could take the total stake offered from the initial 3 per cent to another 3 per cent, depending on the response to the offer.

The floor price of Rs 514 per share compares with the Rs 567 closing price recorded by Hindustan Copper on the NSE on Friday. This means the government has set the minimum offer price below the company's latest closing market price.

The proposed transaction will provide separate participation provisions for retail investors and eligible employees. Retail investors will have a 10 per cent reservation in the offer, while 25,000 additional shares have been reserved for eligible employees.

(ANI)

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