Last updated: Feb 02, 2023 7:07 PM IST

The government currently owns 29.54% of Hindustan Zinc, or HZL, and in 2002 sold 26% of HZL to mining billionaire Anil Agarwal’s group.

The revised target includes all deals the government is working on, but actual implementation will depend on market conditions.

The government is likely to sell part of its residual stake in Hindustan Zinc Ltd by next month to help it meet its revised Rs 50,000 crore sale target for the current fiscal year, DIPAM Secretary Tuhin Kanta Pandey said on Thursday. For the coming fiscal year, the government has planned the sale of strategic stakes in companies such as HLL Lifecare, PDIL, Shipping Corporation and BEML to meet a similar investment reduction target set in the 2023-2024 budget.

The government currently owns a 29.54% stake in Hindustan Zinc or HZL. In 2002, it sold 26 percent of HZL to a mining billionaire group led by Anil Agarwal.

The Vedanta Group later bought 20 percent of the market and another 18.92 percent from the government in November 2003, increasing its stake to 64.92 percent in HZL, which is the world’s second largest integrated zinc producer and the world’s sixth largest silver producer. .

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The government on Wednesday lowered its investment cut target for the current fiscal year (2022-23) to Rs 50,000 crore from last year’s budgeted Rs 65,000 crore.

So far this fiscal year, Rs 31,100 crore has been raised through the sale of a minority stake in CPSE and share buybacks.

In an interview with PTI, the secretary of the Department of Investment and Public Assets Management (DIPAM) said the revised target includes all deals the government is working on, but actual implementation will depend on market conditions.

“This includes what we set out to get from HZL. It will depend on the market,” Pandey said.

The government currently owns 29.54% of HZL shares and 5.54% of the shares are held by public shareholders. Vedanta Ltd, owned by mining tycoon Anil Agarwal, is a promoter holding a 64.92% stake in HZL.

The Cabinet Committee on Economic Affairs (CCEA) in May approved the sale of 124.79 crores of shares, or 29.54%, held by the government of the zinc producer.

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At the current price of Rs 325.45 per share, 29.54% of the shares will bring about Rs 40,000 crore to the government.

Pandey said that, given that divestitures are subject to market conditions, it is not certain that what is budgeted will be achieved.

“This item (budget target to reduce investment) will remain undefined. We will strive for this, but we cannot be sure that we will achieve this, ”he added.

Pandey said that in the next fiscal year, the government is actively pursuing companies that are in an advanced stage of completing strategic sales. This includes HLL Lifecare, PDIL, Shipping Corporation, BEML and NMDC Steel. In addition, the sale of Ferro Scrap Nigam Ltd (FSNL) is expected to be completed, but proceeds from the sale will go to MSTC’s parent company and not to the government.

“We have IDBI Bank and we hope to be able to launch CONCOR EoI soon,” he said. The government and LIC are jointly selling about 61% of shares in IDBI Bank and have received several expressions of interest (EOI) for the same.

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“The due diligence of IDBI Bank has begun, which is a long process as the RBI, security and documentation need to be reviewed,” Pandey said.

As for Concor, in November 2019, the Cabinet of Ministers approved the strategic sale of 30.8% of the shares, together with management control from state capital in the amount of 54.80%. The government will retain a 24 percent stake after the sale, but without veto power.

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(This story was not edited by the News18 staff and is published from a news agency syndicated channel)

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