Hindustan Copper (HCL) floor price has been fixed at Rs 70. The government would be selling 371.19 lac shares through the offer for sale on Wednesday the 3rd of July. Shares of HCL closed at Rs 72.65, down Rs 5.15 or 6.62%. The low of the day was Rs 65 which also happens to be the 52 week low. On the NSE the stock made a low of Rs 62.25 and closed at Rs 72.35.

HCL had earlier done an OFS on 23rd November 2012 where the government had sold 516.11 lac shares at a floor price of Rs 155. The share price from that day has been falling and is now less than half compared to the November OFS.

The floor price looks decent if compared to the market price but that’s where the comparison ends. The valuations at even these levels are expensive. The company has earned an EPS of Rs 3.84 for the year ended March 2013. The PE based on these earnings is 18.23 times which is certainly not cheap by any standards.

Looking at the response to PSU issues of offer for sale and the bail out of issue after issue by LIC and PSU banks, it makes sense to skip the issue.