The offer for sale (OFS) by Hindustan Copper has kicked off for the second day on Wednesday, August 26, after witnessing strong demand from institutional investors a day ago. Today, the offer is available for retail investors. The shares of Hindustan Copper rebounded after a drubbing seen on Tuesday.
On BSE, the stock rose to ₹551.80 apiece, up 3.5 per cent. On Tuesday, Hindustan Copper share price closed 7.04 per cent lower at ₹533.20 apiece. In the Hindustan Copper OFS, the government is selling over 5.80 crore shares or up to 6 per cent (including 3 per cent green shoe option) at a floor price of ₹514 apiece, a 10.38 per cent discount over Monday's closing share price.
"The government has decided to exercise the entire green shoe option," Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said on X on Tuesday evening. The institutional investor portion was booked 3.41 times as the Hindustan Copper OFS garnered bids for 8.91 crore shares as against 2.61 crore shares reserved for them.
This government divestment coincides with exceptionally strong operational performance, said Seema Srivastava, senior research analyst at SMC Global Securities. In Q1FY27, Hindustan Copper reported a stellar 163 per cent year-on-year (YoY) increase in net profit to ₹353 crore, alongside an 81.4 per cent Y-o-Y surge in revenue to ₹936.5 crore, propelled by robust operational leverage and elevated global copper prices.
Furthermore, the long-term demand for copper remains exceptionally strong, propelled by rapid expansion across electric mobility, power infrastructure, data centers, and renewable energy transitions. Despite these stellar fundamentals, retail investors should exercise caution regarding immediate OFS participation as analysts believe it is a better opportunity in the longer run.
Srivastava highlighted that the shares are offered to retail bidders at the institutional cut-off price of ₹520 without any retail discount. The current market price of ₹532.65 offers a narrow 2.4 per cent safety margin, exposing short-term applicants to downside volatility if market prices sink toward the floor, she said.
"The structural narrative remains highly compelling. As India’s sole vertically integrated pure-play copper miner, the company stands as a primary beneficiary of secular demand drivers including electric vehicles, renewable energy infrastructure, and power grid modernization, making it a valuable long-term core portfolio holding despite short-term OFS pricing dynamics," Srivastava opined.
Mahesh M. Ojha, vice president, research & business development, Kantilal Chhaganlal Securities, also finds the OFS a compelling long-term opportunity, as he said that the cyclical nature of the business can be risky in the short term. "Hind Copper is a cyclical and commodities-led business and therefore only suitable for long-term investors.
Valuations are not cheap. There is only little room for upside in the near term, so only long-term investors should consider applying," he opined.