Government To Invite Bids For Hindustan Zinc Stake Sale By August-End
The Ministry of Finance is in the process of hiring financial advisors for divestment of Hindustan Zinc Ltd. and aims to invite bids by the end of August, according to two government officials.
The hiring of merchant banks and financial advisors will be completed by the end of June. Thereafter, the structuring and due diligence will begin, followed by inviting of bids, said one of the officials on the condition of anonymity as the information is not public yet.
The mandate is to complete the divestment within this financial year, the official quoted above said.
Divestment of Hindustan Zinc is crucial for the government given that the privatisation of Bharat Petroleum Corp.. was called off and sale of Container Corp. has been facing procedural delays. Divestment of Pawan Hans, two public sector banks, and Central Electronics Ltd. has also been shelved for now after tepid response.
The government has set itself a disinvestment target of Rs 65,000 crore in the financial year 2022-23. It has so far raised Rs 24,046.4 crore, including Rs 20,516.12 crore from the LIC IPO.
According to the second government official, who also chose to speak on the condition of anonymity, the Hindustan Zinc stake will be divested in tranches. The exact modalities of the offer for sale is yet to be finalised, the official said.
Queries emailed to the Department of Investment and Public Asset Management remained unanswered.
In November 2021, the Supreme Court allowed the central government to disinvest its residual stake in Hindustan Zinc in the open market. In May this year, the Union Cabinet approved the sale of the central government's 29.58% stake in Hindustan Zinc. It aims to raise close to Rs 38,000 crore through the stake sale.
Hindustan Zinc is majority owned by the Vedanta Group, which acquired 26% shareholding along with management control in 2002. A year later, the group bought another 18.92% and then purchased 20% more from the market.