Hindustan Copper CMD Rules Out QIP, Internal Accruals to Fund Ambitious FY30 Plan

Hindustan Copper Sees No Need for QIP, Expects Healthy Internal Accruals to Fund Expansion Plans

Hindustan Copper, India's only integrated copper miner, is unlikely to take the qualified institutional placement (QIP) route to raise funds anytime soon, according to chairman and managing director Sanjiv Kumar Singh. Despite board approvals, Singh has stated that the company's healthy internal accruals will fully fund its expansion plans until 2030.

The Kolkata-based public sector miner plans to reach a capacity of 12.2 million tonne per annum (MTPA) by FY30, at its operational mines as well as those it is reopening in areas such as Rajasthan, Jharkhand, and potentially Sikkim. The company's Vision 2030 document outlines a capital expenditure plan exceeding Rs 7,000 crore for the period.

Hindustan Copper's internal accruals are expected to fund its expansion plans, with the company having roughly Rs 1,000 crore worth of fixed deposits (FDs) on hand. Some investors have expressed concerns about the fundraise, pointing to the company's "stretched" valuations, with a price-to-earnings (P/E) ratio of more than 80x, far higher than any listed mining firm in India.

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Hindustan Copper's Financial Performance

Despite these concerns, Hindustan Copper's record revenue and profits revived investor optimism, backed by a bullish demand outlook from energy infrastructure, automobiles, and data centres. The company's FY26 profit nearly doubled to Rs 921 crore on a standalone basis, while revenue grew to Rs 3,150 crore.

The government's focus on increasing domestic copper production is also a source of optimism among investors, with India importing 95 percent of its copper needs. The devaluation of the rupee comes at a significant cost to the Indian economy, especially imports, but Hindustan Copper notionally stands to benefit, with prices of non-ferrous metals being denominated in dollars.

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Industry estimates suggest that every 1 percent depreciation in the rupee adds around 1.7 percent to the topline of the company. Copper prices remain high at $13,587 a tonne on the LME, driven by strong consumption and declining production in China.

Hindustan Copper's Expansion Plans

The company's capex plans are expected to be conservative, keeping the global economic picture in mind. This fiscal, the company's capex plans are expected to be around Rs 550 crore, increasing to Rs 1,000 crore plus in 2027-28. The company plans to expand its production capacity, with around 5 MTPA expected from the Malanjkhand Copper Project in Madhya Pradesh, 2.9 MTPA from the Khetri mines in Rajasthan, and 4.3 MTPA from the Ghatsila mines.

While the Iran war has not affected demand, some input costs such as explosives needed in the mining process have increased. Hindustan Copper has signed a strategic pact with CODELCO, Chile's state-owned copper miner, the largest in the world, which has the potential to grow its capacity beyond 12.2 MTPA.