New Delhi: The Indian government is mulling to divest 10% of its equity stake in the country's copper mining major Hindustan Copper Ltd (HCL) through the auction route in the current fiscal 2012-13, the company's Chairman and Managing Director Shakeel Ahmed said.
"There will be 10% stake sale by the government in one tranche. The Department of Disinvestment will decide the date. The disinvestment is likely to be done through the auction route, though there has to be final view," Shakeel told reporters at the Delhi Investment Summit on Afghanistan, organized by the Confederation of Indian Industry (CII) in New Delhi earlier Thursday.
The government, which currently holds 99.5% stake in the company, expects to get approval of Cabinet Committee on Economic Affairs (CCEA) for offloading its stake in the copper major shortly.
"We are hoping that a revised proposal would be approved by the Cabinet Committee of Economic Affairs very soon. The Cabinet note has been circulated. Everything is in place. I believe the proposal would be approved in the next Cabinet meeting or in the next to next," Ahmed said.
He, however, did not elaborate on the amount to be raised through the stake sale. "This will be known after the Group of Ministers take a call on the price," he said.
Earlier, in fiscal 2010-11, Hindustan Copper had proposed issuance of 10% fresh equity, and 10% stake sale through a follow on public (FPO), but later in 2011-12 the company withdrew its FPO plans as the company's cash flow position improved to finance its expansion plans.
The government used the auction route for the first time for India's largest oil and natural gas explorer Oil and Natural Gas Corp Ltd's (ONGC) 5% share sale to institutional investors earlier this year.
However, the ONGC's share auction failed to attract institutional investors and the offer was salvaged by Life Insurance Corp of India (LIC) with the insurance giant picking up 4.41% of the total issue size.
For the current fiscal 2012-13, the government's disinvestment target is Rs 300 billion through stake sale in state-run companies.
The other state-companies which are on the government's radar for share sale are National Aluminium Co Ltd, Steel Authority of India Ltd, Neyveli Lignite Corp Ltd, Hindustan Aeronautics Ltd and Rashtriya Ispat Nigam Ltd. The government may offload 5%-10% in each company.
Shares of Hindustan Copper were trading at Rs 261.45, up 1.28% on the Bombay Stock Exchange, at 2:28 pm, today, from its previous close.