Hind Copper's OFS Loses Luster Amid Metal Stock Rally

Hindustan Copper's offer for sale (OFS) may not be an attractive option for retail investors, despite a nearly 10% discount to its closing price. The stock fell 7.04% to ₹533.20 on Tuesday, with the floor price set at ₹514 per share.

Analysts are cautious about retail participation in the OFS, citing elevated valuations and a recent sharp rally in metal stocks that may limit near-term gains. 'Investors should not treat the discount as the sole reason to subscribe,' said Siddarth Bhamre, head - institutional research at Asit C Mehta.

The non-retail portion of the issue was subscribed more than three times on Tuesday, with bids placed for over 8.91 crore shares against the 2.61 crore shares on offer. The government has activated the greenshoe option to meet demand, with the OFS comprising a base offer of 3% of Hindustan Copper's paid-up equity and an additional 3% greenshoe option.

Raj Gaikar, Equity Research Analyst at SAMCO Securities, noted that the stock trades at nearly 40 times trailing earnings and 15 times book value. 'The upside looks limited; allotment may also be limited, while any fall in copper prices could quickly erase the small price gap,' he said.