The Union Government has opted for auctioning shares for the 9.5 per cent disinvestment in the 99.49 per cent state-owned Hindustan Copper.

Sources said that the inter-ministerial group, consisting of bureaucrats, took the decision a fortnight ago.

The original divestment plan of 2010, which could not be implemented, had envisaged book-built share offer.

The Government panel has also appointed five merchant bankers and a legal advisor for the less-elaborate and quicker exercise.

The engaged merchant bankers are ICICI Securities, UBS Securities, Kotak Mahindra Capital, SBI Capital and Enam Securities, which were chosen as the book runners for the earlier plan. Amarchand and Mangaldas would be the legal advisor.

DRHP not required

“The merchant bankers would manage the issue for a token fee of Re 1,” said a top Union Government official. If implemented, this would be the second auction after the ONGC’s stake off-loading in March this year.

The auction process would not require filing of a DRHP or an RHP and the two-stage road-shows. Hind Copper had last year dropped the proposal for fresh issue of another 9.5 per cent.

The Hind Copper divestment was postponed twice in the past couple of years because of low realisable valuation in the context of depressed market condition.

“Merchant bankers had suggested a floor price that was significantly lower — less than 20 per cent of then ruling market price. This was not acceptable to the Government,” the source said.

The nominally listed HCL stock, on Wednesday, closed at Rs 261.15 on the BSE, down 1.17 per cent.

>jayanta.mallick@thehindu.co.in

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