Why Hindustan Copper shares rose 11% in a declining market today

Shares of Hindustan Copper Limited rose 11% to an intraday high of Rs 133.70 on BSE after mining giant Vedanta Group said it was considering making an offer to buy the government’s stake in the Crown corporation as it becomes privatized. .

“Yes, we are looking (at) Hindustan Copper. We are doing our due diligence … The dates haven’t come … As soon as they announce the date, things will be a lot more exciting and people will start to believe that the process is happening in India, ”billionaire founder Anil Agarwal told PTI.

The action ended up 4.17% to Rs 124.95 from the previous close of Rs 119.95. With a market cap of over Rs 12,000 crore, the stocks are above the 5-day, 20-day and 200-day moving averages, but below the 50-day and 100-day moving averages.

The mid-cap stock has delivered 272% return to its shareholders over the past 12 months and is up 104% year-to-date.

In September, the government sold a 6.35 percent stake in Hindustan Copper Ltd to bidders other than retail buyers who participated in the company’s offer to sell (OFS) on the first day of the sale.

After the transaction, the government’s stake in the company fell to 66.40 percent from 72.76 percent earlier.

According to MarketsMojo, the company’s ability to service its debt is low with a low EBIT to interest (avg) ratio of -0.26. With a ROCE of 5.2, it has a very expensive valuation with an enterprise value of 5.7 on capital employed.

In addition, institutional investors decreased their stake by 2.63% from the previous quarter and collectively own 14.16% of the company.

Incorporated in November 1967, Hindustan Copper has the distinction of being the only vertically integrated copper production company in the country, as it manufactures copper from the stage of extraction to enrichment, smelting, refining. and the casting of the refined copper metal into salable downstream products.

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