The government-owned Hindustan Copper is likely to come out with its much-awaited follow-on public offer (FPO) in the first quarter of next financial year (2012-13). Unlike the original plan which included issuance of 10% fresh equity, the current plan comprises only 10% stake sale through the FPO route.
The company had already sent a draft Cabinet note to the finance ministry for its views and once the draft is finalised, it would be sent for the Cabinet approval. The disinvestment will bring down promoters? holdings to 89.59% from 99.59% at present.
?We did not want to issue fresh equity. The draft note for Cabinet approval is only for 10% disinvestment,? a company official said.
When contacted, company chairman and managing director (CMD) Shakeel Ahmed confirmed it. ?We have already informed the mining ministry about not going for issuance of fresh equity. Now, once the finance ministry clears it, it would go to the Cabinet,? he said without divulging details about the valuation. The FPO was part of government?s plan to raise R40,000 crore during 2011-12 through selling residual holdings and divesting stakes in some firms to financial institutions. The government had earlier planned to issue 10% fresh equity and 10% stake sale through FPO for the company, but the plan hasn?t materialised.
Though, the company has been maintaining that the offer was delayed because of the unfavorable market conditions, according to a company official, the problem was with the valuations of shares. While the bankers were suggesting a price of R120-150 a share, the promoters of the company were keen on higher valuation.
Hindustan Copper?s net profit had gone up over 70% in the third quarter (October-December) compared with the quarter ended September. The country?s biggest copper mining firm posted a net profit of R79.14 crore in Q3 against R46.46 crore in Q2, though this was marginally lower than R80.72 crore in the same period last year.
The company?s share closed 1.29% up at R297.30 on the Bombay Stock Exchange on Thursday. Its market capitalisation is R27,506 crore.
