Marking the inauguration of its Rs.30,000-crore disinvestment programme for the current fiscal, the government, on Friday, succeeded in offloading about 5.58 per cent of its stake in Hindustan Copper Limited (HCL) to garner Rs.800 crore.

“A total bid for 5.16 crore shares were received. It has been decided to accept the entire number of shares bid for at or above the floor price. Thus, about 5.58 per cent of the total paid-up share capital of HCL stands divested through this issue. The approximate gross receipts from the issue are Rs.800 crore,” a Finance Ministry statement said here at the close of the OFS (offer for sale).

Enthused by the maiden success, Finance Minister expressed cautious optimism on taking the disinvestment process forward to achieve the target of mopping up Rs.30,000 crore set for 2012-13. “I am happy that the issue has been fully subscribed. This is the resumption of the disinvestment process, and we will go forward with the disinvestment processes as approved by the CCEA between now and March…I hope that we can collect the targeted Rs.30,000 crore,” he said.

The Cabinet Committee on Economic Affairs (CCEA) had approved disinvestment of 9.59 per cent of the paid-up equity capital of HCL through the stock exchange mechanism of OFS. With a floor price of Rs.155 per share fixed by the Empowered Group of Ministers (EGoM), a minimum of 4 per cent of the paid-up equity shares (3.70 crore shares) of the mining major was offered for sale with an option to sell an additional 5.59 per cent (5.17 crore shares) in case the sell-off receives a good response.

Even as the investor response has been better than expected, in that the government has been able to divest more than the minimum of 4 per cent equity stake on offer, the fact that the floor price of the shares at Rs.155 each was at a 41 per cent discount to Thursday’s closing price of HCL on the Bombay Stock Exchange (BSE), the scrip hit the lower circuit on Friday to close at Rs.213.05, down 20 per cent from its previous close.

Technically, as per the CCEA approval for divesting 9.59 per cent of the paid-up equity capital, the government still has the option to shed the remaining 4 per cent stake at a later date during the year. For the current fiscal, the government has in its disinvestment pipeline a clutch of major public sector undertakings (PSUs) such as Bharat Heavy Electricals Limited (BHEL), Steel Authority of India Ltd. (SAIL), Rashtriya Ispat Nigam Ltd. (RINL), Hindustan Aeronautics Ltd. (HAL), MMTC Ltd, Nalco, Oil India Ltd. (OIL), NTPC and NMDC.

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