According to market players, there was a huge expectation that the government would be offering shares at a substantial discount to kick-start its divestment programme for 2012-13 and this led to many investors selling a part of their holding to bid during the offer for sale.
According to dealers, retail investors chose to bid during the OFS as the shares would be delivered on Monday and the current market price is still more than 35% higher than the OFS base price. Such investors can sell the shares in the secondary market on Tuesday and still manage to make a decent amount of profit, they said.
Many investors sold a part of their shares and have put in bids in the OFS to get the shares at a much cheaper price, said a dealer, wishing not to be named. Exchange data also shows that there was a sudden spurt in the delivery volumes on Tuesday when more than 25% of the trades were settled, he added.
On Friday, shares of Hindustan Copper lost the maximum possible 20% to close at Rs 213.05. On BSE, more than 25 lakh shares were traded, which was more than nine times the two-week average of 2.78 lakh shares. On NSE, more than 78 lakh shares were traded.
Meanwhile, Hindustan Copper's OFS saw LIC along with most government-owned banks place large size bids to lap up the entire offering. The government has managed to raise around Rs 810 crore by selling 5.16 crore shares at an average price of around Rs 157.