Plans to raise up to Rs 1,000 crore this year through equity issue to fund its plans
Hindustan Copper is planning to raise up to Rs 1,000 crore this year through equity issue to fund its major expansion plans.
"We have plans to raise equity of about Rs 800-1,000 crore from the market this financial year," a senior company official said, indicating that the fundraising would happen either through qualified institutional placement or through follow-on issue.
"Following the issue, the holding of the government would come down from about 76% to 69%," the official added.
The decision, however, is yet to get the approval of the government and the executive refused to disclose further details.
The fundraising would boost Hindustan Copper's ambitious plan to raise its mining as well as refining capacities, and hunt and develop new copper ore reserves.
"We have started a very ambitious project on exploration and we plan to go beyond the average 500 metre up to which we have mined so far. This means we are not fully aware of the potential of the reserves of our mines. Mineral Exploration Corp has been given the mandate to start exploration in the Singhbhum (in Jharkhand) and Khetri (Rajasthan) belt and also in Malanjkhand (Madhya Pradesh). For Chhattisgarh, we have formed joint venture with state mineral development body as we don't have a presence in the state," Hindustan Copper chairman and managing director Santosh Sharma said.
This initiative would come on top of the state-owned miner's current mine expansion exercise.
"Our flagship Malanjkhand underground mine expansion project in MP would commence production from December, while in FY18, Banwas mine in Rajasthan and Kendadih mine in Jharkhand were commissioned. Consequently, in the current year, we expect significant growth in the mine production," he said.
Despite these projects, Hindustan Copper would still remain small compared with two other private sector copper refiners, Vedanta and Hindalco.
"If we compare ourselves, Vedanta and Hindalco together have smelting capacity of 9.5 lakh tonne while our capacity is 1 lakh tonne now theoretically while actual output in about 70,000 tonne. In this scenario, our priority is to fully exploit our capacities," Sharma said.
The closure of Vedanta's Tuticorin plant, however, would have little impact on the domestic demand-supply scenario as domestic demand is about 6.5 lakh tonne against availability of over 9.5 lakh tonne.
This excess availability, which is otherwise exported, would meet part of 4 lakh tonne drop in availability because of the closure of Vedanta's plant, he said.
The Tuticorin smelter contributed to 48% of country's refined copper production during FY18 and its closure would bring down refined copper availability to 5.1 lakh tonne this year, rating firm Icra said on Tuesday.
...& ANALYSIS
- Following the issue, the holding of the government would come down from about 76% to 69%
- The fundraising would boost Hindustan Copper's ambitious plan to raise its mining as well as refining capacities, and hunt and develop new copper ore reserves
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