Centre to pare some of its stake in Hindustan Zinc this fiscal: DIPAM Secretary

In the coming fiscal,  government has lined up strategic stake sales in companies like HLL Lifecare, PDIL, Shipping Corporation and BEML in order to meet disinvestment target set in the 2023-24 Budget.

Centre presently holds a 29.54 per cent stake in Hindustan Zinc or HZL. In 2002, it sold 26 per cent of HZL to the mining billionaire Anil Agarwal-led Vedanta group.

Anil Agarwal-led Vedanta group later bought 20 per cent from the market and another 18.92 per cent from the government in November 2003, raising its ownership to 64.92 per cent in HZL, which is the world’s second-largest integrated Zinc producer and sixth-largest silver producer globally.

The government on Wednesday lowered the disinvestment target for the current fiscal (2022-23) to ₹50,000 crore from ₹65,000 crore budgeted last year.

So far this fiscal, ₹31,100 crore has been raised by way of minority stake sale in CPSE, and share buyback.

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

“It includes what we had intended we will raise from HZL. It would depend on the market,” Pandey said.

The government currently holds a 29.54 per cent stake in HZL, while a 5.54 per cent stake is with public shareholders. Mining mogul Anil Agarwal’s Vedanta Ltd is the promoter holding a 64.92 per cent stake in HZL.

The Cabinet Committee on Economic Affairs (CCEA) in May approved the sale of 124.79 crore shares or 29.54 per cent stake government holds in the zinc producer.

At the current price of ₹325.45 a share, a 29.54 per cent stake would fetch about ₹40,000 crore to the government.

Pandey said considering that disinvestment is dependent on market conditions, it cannot be said with certainty that what is budgeted would be achieved.

“This item (disinvestment budget target) will remain uncertain. We will aspire to do it, but we can’t be very sure we will achieve,” he added.

Pandey said for the next fiscal, the government is actively pursuing the companies, which are in the advanced stages of completion of strategic sales. This includes HLL Lifecare, PDIL, Shipping Corporation, BEML and NMDC Steel. Also, the sale of Ferro Scrap Nigam Ltd (FSNL) is expected to be concluded but the proceeds from the sale will accrue to the parent company MSTC and not to the government.

“We have IDBI Bank and hopefully, we would be able to launch CONCOR EoI soon,” he said.

The government and the LIC are together selling about 61 per cent stake in IDBI Bank and have received multiple Expressions of Interest (EOI) for the same.

“IDBI Bank due diligence has started, it is a long process as RBI and security clearance and documentation has to be checked,” Pandey said.

With regard to Concor, the Cabinet, in November 2019, had approved the strategic sale of a 30.8 per cent stake, along with management control, out of the government equity of 54.80 per cent. The government will retain a 24 per cent stake post-sell-off but without any veto powers.