Hindustan Copper may plan for FPO

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Hindustan Copper may plan for FPO

Hindustan Copper may approach the Centre with an follow on public offering (FPO) proposal by the end of this financial year or early next fiscal.

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Hindustan Copper may approach the Centre with an follow on public offering (FPO) proposal by the end of this financial year or early next fiscal.

According to a senior company official, the proposal will be finalised depending on its fund requirements in development of Malanjkhand and Chapri Sideshwar copper deposits. Hindustan Copper has recently appointed SRK Consulting Engineers & Scientists to conduct pre-feasibility study on the proposed projects.

Various options

"Depending on the fund requirement, we will explore various financing options including IPO, private equity and debt finance," the official said. According to the official, Hindustan Copper, currently, has a loan of nearly Rs 160 crore with a favourable debt-equity ratio of approximately 0.4.

On whether discussions were held with the promoter - the Union Ministry of Mines - in this regard, he said that any such discussions could be held once the company has a "clear idea" of the fund requirements.

Estimates

According to initial estimates, the company may require close to Rs 1,800 crore in developing various deposits in next five years. A major part of the investment may be directed towards the development of Malanjkhand and Chapri reserves. "We are now carrying out pre-feasibility studies for both the projects. The reports are expected to be submitted in next six months following which we will get a clear idea of our future course of fund requirements for Malanjkhand and Chapri projects," the official said.

Mining

The company currently does open-cast mining at Malanjkhand. "This is a good reserve. We are currently studying the options of either extending the existing open cast mine or adopting underground mining route in the future. The fund requirement will vary depending on which option we will exercise," he said.

It may be mentioned that though the Hindustan Copper stock is listed in BSE, the Centre holds 99.50% stake in the company. The 0.50 per cent public holding consists the ESOP granted previously and institutional shareholding of 0.11%, reports The Hindu Business Line.