The cabinet committee on Economic Affairs (CCEA) on Wednesday, 25 May, approved the sale of the entire remaining stake in the Hindustan Zinc Ltd (HZL). The government holds a 29.5% stake in HZL which would fetch the Centre Rs. 38,062 crores according to the closing price of the company’s share.
Share of Hindustan Zinc surged to 7% on Wednesday after the cabinet approved the stake sale in the company. The majority of stakes in Hindustan Zinc were held by the government. The government had offloaded a 26% stake in the firm in 2002 brought by the Vedanta Group and the group later acquired a 64.92% stake in the company. In 2003, the additional 19% shares were bought by Anil Aggarwal, and in 2009 the company exercised a call option according to the share purchase agreement, contested by the Center.
The government may sell its stake in parts through an offer for sale (OFS), and it will be structured by DIPAM (Department of Investment and Public Assets Management), which will help the Center to move closer to its Rs 65,000 crore divestment target for the financial year 2022-23.
The current round of selling stakes is part of the government’s divestment for the financial year. The idea is also to take offload a stake in ITC, where it holds a 7.91% stake. The details of an offer for sale (OFS) and the extent of investment are still under process. The government is expecting to complete the process by September, according to the reports.