Hindustan Copper today said its about Rs 4,000-crore follow-on public offer (FPO) is likely to hit the markets by September-October and investment bankers to manage the process will be appointed by the end of this month.
"We are expected to file the draft red herring prospectus (DRHP) by the end of July. The 20 per cent FPO may well hit the market by September-October," Hindustan Copper Chairman and Managing Director Shakeel Ahmed told PTI over phone.
Mines Minister B K Handique had earlier said the share sale could generate around Rs 4,000 crore. The Cabinet had earlier this month cleared the HCL divestment plan.
"Today was the last for receiving bids from investment bankers. We have got bids from nine banks and we will appoint a consortium of five banks as book runners-cum-lead managers by June 30," Ahmed added.
Merrill Lynch, UBS, Kotak Mahindra Capital, Enam Securities, Avendus Capital, IDBI Capital Market Services, SBI Caps, ICICI Securities and IDFC-SSKI have submitted bids, Ahmed added.
The company's shares today ended at Rs 495.30, up 0.49 per cent on the Bombay Stock Exchange. Based on this share price, Rs 8,000 crore could be generated through FPO. However, Ahmed said, "the issue price is likely to be decided by an empowered group of ministers few days before the IPO."
Already 0.41 per cent HCL stake with the public. The proposed FPO will see the government holding coming down to 81.45 per cent from 99.59 per cent at present.
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HCL issue will see government divesting 10 per cent of its holding, whle the company will be issuing fresh shares in the same proportion.
Hindustan Copper may see further equity dilution in next few years to meet the Sebi guideline for listed companies-- which mandates them to have a 25 per cent public float.
"Certainly in 2-3 years we will hit the 25 per cent public float limit. We will always go in accordance with whatever Sebi directive is here," he added.
Ahmed said HCL would embark on increasing its mining capacity from the present 3.2 million tonne annually to 12 million tonne in the next five-six years, and it has envisaged a capital investment of Rs 4,580 crore for this expansion. The company is hopeful to partly meet its fund requirement through the upcoming FPO.
To expand its production, the company is also eyeing copper assets in countries like Chile and Namibia.