Goverment raised Rs 610 crore ($110 million) by selling 4 per cent of state-run Hindustan Copper Ltd BSE -20.00 % in a share auction on Friday, kickstarting a stalled divestment programme that is crucial to rein in a ballooning fiscal deficit.
The auction generated bids for 38.9 million shares, stock exchange data showed. The government had offered 37.01 million shares, or 4 per cent of the company, but had the option to sell a further 51.71 million shares.
The bids came at a weighted average price of RSs 156.81, stock exchange data showed, slightly above the Rs 155 floor price.
The government owns 99.59 per cent of Hindustan Copper, and the limited free float had inflated the traded price of the shares. The stock fell about 20 per cent, its daily limit, on Friday to 212.95 rupees.
State-run Life Insurance Corp of India and State Bank of India BSE -0.47 % were among the bigger buyers of shares, two sources directly involved with the process said, an indication of limited interest from private sector investors.
Government aims to raise Rs 30,000 crore through share sales in state companies in the fiscal year ending in March, but has managed just Rs 125 crore so far, through an IPO by National Buildings Construction Corporation. Weak market conditions have deterred public issues or auctions.
The government raised Rs 14000 crore through share sales in the previous fiscal year, less than half its Rs 40000 crore goal.
Earlier this month, the government pushed back a decision to sell a stake in state-run National Aluminium BSE -1.31 % Co, in a deal that could have raised about $270 million. Last month, state steelmaker Rashtriya Ispat Nigam Ltd shelved an IPO due to disagreement with bankers over pricing, sources with direct knowledge of the matter said.
The government has lined up stake sales in miner NMDC Ltd BSE -1.89 % and explorer Oil India BSE 0.56 % before Dec. 20, a government official said earlier this week.
Axis Capital, ICICI BSE -0.74 % Securities, Kotak Securities, SBI BSE -0.47 % Capital and UBS were the lead managers for the Hindustan Copper BSE -20.00 % sale.