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Jul 12, 2012, 08.23 AM IST
Hindustan Copper's (HCL) follow-on public offer is likely in August, its Chairman and Managing Director, Mr Shakeel Ahmed, said. The Government, which owns 99.59%, expects to divest 10% stake in the company through the offer.
Mr Ahmed said the company decided not to issue fresh equity as buoyancy in copper prices had helped to generate enough cash to fund expansion. Earlier, the company had planned to issue 10% fresh equity as part of the divestment process.
“A Cabinet note has been moved in this regard and we hope to receive the approval some time in July. The disinvestment may happen as early as August,” Mr Ahmed told reporters.
HCL shares ended marginally higher on Friday at Rs 260.05 on the BSE.
Stating that the current market price did not reflect the true value of the company because of a free float of only 0.4%, Mr Ahmed indicated that the follow-on offer price should be lower than the market price to attract the investor interest.
HCL is planning to expand its ore output to 12.4 million tonnes (mt) a year by 2017 from the current level of 3.4 mt.
The company plans to start eight new mining projects with an investment of Rs 3,435 crore over the next five years, he said. For the current year, the company has set a production target of four mt of ore and 35,000 tonnes of metal-in-concentrate according to the memorandum with the Mines Ministry. Last year, it produced 3.47 mt (million tonnes) of ore and 31,378 tonnes of metal-in-concentrate.
Mr Ahmed said slowing economic growth may impact copper offtake in the current year. “There’s some slowdown in the last two-three months. We expect the consumption to grow at 5-7% against last year’s eight per cent,” he said, estimating current year demand at six lakh tonnes.
For the year-ended March, HCL reported a net profit of Rs 323 crore on revenue of Rs 1,638 crore. In the previous year, its net profit stood at Rs 224 crore on revenue of Rs 1,258 crore.
Tags: Hindustan Copper FPO
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