Government offers 3% stake in Hindustan Copper through OFS, floor price at Rs 514/share

The government will sell up to a 3 per cent stake in state-owned Hindustan Copper Ltd (HCL) through an offer for sale (OFS), setting the floor price at Rs 514 per share as it looks to raise funds through its disinvestment programme.

The two-day OFS will open for non-retail investors on Tuesday, August 25, while retail investors will be able to participate on Wednesday, August 26. The government currently holds a 66.14 per cent stake in the copper producer. Under the proposal, the Centre will initially offer a 1.5 per cent stake, representing more than 1.45 crore equity shares. It will have the option to sell another 1.5 per cent through the greenshoe mechanism if demand from investors is strong.

If the entire 3 per cent stake is sold, the government's holding in Hindustan Copper will fall to a little over 63 per cent.

Floor price set at Rs 514

The floor price of Rs 514 per equity share has been fixed for the OFS. Investors will be able to place bids at or above this level during the designated trading window. The OFS mechanism allows promoters of listed companies to sell shares through the stock exchange platform in a transparent and time-bound process. A portion of the offer is reserved for retail investors, while institutional and other non-retail participants receive a separate bidding window.

The government has increasingly used the OFS route to reduce its holdings in listed public sector enterprises while taking advantage of market conditions and investor demand. Hindustan Copper occupies a strategically important position in India's metals sector as the country's only vertically integrated copper producer involved in activities ranging from mining and beneficiation to smelting, refining and production of copper products.

The company comes under the administrative control of the Ministry of Mines and has mining operations and projects across several states.

Copper demand in focus

The stake sale comes at a time when copper has assumed greater strategic importance because of its extensive use in electricity networks, renewable energy, electric vehicles, electronics, construction and industrial manufacturing.

Demand for the metal is expected to increase as India expands its power infrastructure and accelerates investment in clean-energy technologies. Electric vehicles, charging infrastructure, solar installations and modern electricity grids require significant quantities of copper. The government has consequently placed greater emphasis on strengthening domestic access to critical and strategic minerals while reducing India's dependence on overseas supplies.

Hindustan Copper has been pursuing plans to expand its mining capacity to meet the anticipated increase in domestic demand. Its assets include copper mines and associated facilities in different parts of the country.

Disinvestment drive continues

The transaction will also contribute to the Centre's disinvestment receipts for the current financial year. Rather than pursuing only large-scale privatisations, the government has increasingly relied on minority stake sales in listed public sector companies to monetise part of its holdings while retaining management control. The final proceeds from the Hindustan Copper OFS will depend on investor participation, the number of shares ultimately sold and the price discovered during bidding.

The greenshoe option gives the government flexibility to increase the size of the transaction if the initial portion receives sufficient demand. With copper becoming increasingly important to India's infrastructure and energy-transition ambitions, investor response to the offer will also provide an indication of market appetite for exposure to the country's state-owned mining and metals businesses.