Life Insurance Corporation (LIC) of India again came to the government’s rescue on Friday – this time to help its offer for sale (OFS) in Hindustan Copper sail through.

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Response to the issue was poor with the bids coming at a weighted average price of Rs156.56, slightly above the set floor price of Rs155 a share and 41% less than the closing price on Thursday.

LIC, along with public sector banks, apparently put in the majority of the orders in the last hour of bidding. The government, which intended to sell 4% stake, or 3.70 crore shares of Hind Copper with an option to sell an additional 5.17 shares through the OFS, got bids for 5.16 crore shares in all.

That helped it raise around Rs810 crore.

The poor response in the bidding impacted the stock price in the secondary market as well, with the stock hitting the lower circuit and closing at Rs213.05, down 20%.

Experts, however, believe the sanity shown by the government in fixing the floor price has helped avoid losses for those who have subscribed to the issue.

“Government has achieved what it wanted and the investors who applied also have an opportunity to encash the difference in allocation price and market price on Monday. Though the share price may fall sharply on Monday, the investors still have a chance to sell the shares at a profit,” said Arun Kejriwal, director at Kris Securities.

As per the Securities and Exchange Board of India’s guidelines on OFS, the settlement will take place on the next trading day (T+1), similar to trade for trade. So, even if the share price tanks by a further 20% to Rs170, which is quite likely, those who have invested at a lower price will make a profit.

LIC had stepped in to bail the government out even in the last OFS – for ONGC. However, it had to buy the shares at a price higher than that prevailing then, causing a loss.

Experts believe that good-quality upcoming issues from government stable are likely to see higher interest if the floor price is set reasonably.

“As long as sanity is used in pricing, further stake sale in issues like Oil India and NTPC should see better response. NTPC is a low-risk and decent stock, while Oil India, too, is an attractive stock with reasonably traded volumes,” said Kejriwal.