Hindustan Zinc shares were up 7% on Wednesday after media reports said the Cabinet had approved a stake sale in the company.
According to sources, the government intends to sell its entire stake in Hindustan Zinc. It owns 29.54 percent of the zinc manufacturer. As of today, the stake is worth Rs 39,385.66 crore. The stock climbed 6.81 percent to Rs 315.90 following the report.
Hindustan Zinc was a company that was majorly owned by the government. In 2002, the government sold a 26% stake in the company, which was purchased by Vedanta Group. The Group subsequently increased its stake in the company to 64.92 percent.
Part of disinvestment plan
The current round of selling is part of the government’s fiscal year divestment goals. The plan is also to sell a stake in ITC, in which it owns 7.91 percent. The specifics of an offer for sale (OFS) and the scope of divestment are still being worked out. According to an earlier report, the government expects the process to be completed by September.
The government has been forced to consider other options due to significant delays in the strategic sale of Pawan Hans, Shipping Corporation of India (SCI), IDBI Bank, and Bharat Petroleum Corporation Ltd (BPCL) as well as the scaled-down public offer of Life Insurance Corporation (LIC) of India.
The government has formulated a disinvestment target of Rs 65,000 crore for FY23. LIC’s public offering earlier this month generated nearly Rs 20,560 crore.