Government of India is divesting 37,119,152 shares (4.01% of equity capital) in Hindustan Copper Ltd. (HCL). It has set a floor price of Rs70 for the issue. HCL is the only vertically integrated copper producer in India. However, at the OFS price of Rs70, the stock is available at a valuation of 21.0x PE and 11.9x EV/EBITDA based on FY2012 numbers, which is expensive compared to its peers. Miners such as Coal India, MOIL and NMDC are trading in the range of 3-7x FY2012 EV/EBTIDA. Hence, we recommend investors to AVOID subscribing to HCL issue.

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