Discount sale: HCL floor price at 42% off

Setting the stage for the first PSU disinvestment in the current financial year, the government has fixed Rs 155 as the floor price for the sale of 4 per cent stake in Hindustan Copper (HCL) on Friday. The floor price is at a discount of 41.8 per cent to its closing price of Rs 266.30 at the BSE on Thursday, making the offer attractive for investors.

"The floor price for the sale in terms of the OFS (offer for sale) guidelines shall be Rs 155," the government said in a stock exchange filing. The stake sale, which is expected to garner around Rs 573 crore will be the first disinvestment in any PSU in the current financial year. The sale on Friday would be a one-day exercise.

On Thursday, the company's shares gained more than 11 per cent on the BSE, adding Rs 2,500 crore to its market capitalisation. It touched an intra-day high of Rs 276.50 on the BSE, before closing at Rs 266.30.

"The pricing looks very fair. A 42 per cent discount will attract investors. Last time, when ONGC shares were offloaded, the floor price was close to the market price. That kept away potential investors. The issuer should leave something on the table for the investors," said Pawan Dharnidharka, a broker.

"It looks like the government is testing the waters with the small offer," said another analyst.

The government had earlier planned to offload 9.59 per cent out of its 99.59 per cent equity in HCL. However, it has now decided to offload its stake in two tranches.

On September 14, the government gave its nod for disinvestment of 9.59 per cent equity in HCL through an offer for sale of shares on the stock exchange. The government proposes to sell 37,008,720 equity shares of face value of Rs 5 each on Friday.

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