Indian govt to put Hindustan Zinc share sale plan on hold? Here's what we know
1 min read 12 Mar 2023, 06:47 PM ISTThe sale is only likely after a finality reached on Vedanta's planned sale of global zinc assets to the erstwhile PSU.
PremiumThe Indian government is unlikely to finalise the sale of its remaining 29.54% stake in Hindustan Zinc this fiscal. According to reports, the plan may be put on hold unless the company calls off the nearly $3 billion cash acquisition of two Vedanta Group subsidiaries. Vedanta owns 64.9% and the government is HZL's largest minority shareholder with a 29.54% stake.
"Investors need certainty about the deal and till a finality is reached, the government may not go ahead with its planned offer for sale," news agency Reuters cited a senior government source to explain.
The government had initially planned to sell part of it within FY23 (ending on March 31) in order to help reach its ₹500 billion divestment target for the year. But with the deal currently stuck in limbo this appears unlikely.
ALSO READ: Dividend paying stock: Hindustan Zinc shares yield 15.5% in FY23
The Cabinet Committee on Economic Affairs had approved the sale the government's 29.54% stake in the zinc producer. At the current price of ₹304.65 a share, this is valued at around ₹37,000 crore.
The mines ministry has urged Vedanta to explore other cashless methods of acquisition of these assets.
Officials said that the stake sale was only likely to happen after clarity was received on whether the overseas zinc asset transfer is happening and minority stakeholder concerns have been addressed.
ALSO READ: Moody's downgrade Vedanta Resources corporate family rating. Here's why
Vedanta had said in January that it would sell its global zinc assets to HZL for cash consideration of $2,981 million. The decision had not gone down well with the government, with the Centre asserting that it had been "kept in the dark" about the deal.
The Centre also had said that it would explore all legal options when it came to the Anil Agarwal-promoted company's plans to sell its global zinc assets to HZL.
Hindustan Zinc is an integrated producer of zinc, lead and silver.
(With inputs from agencies)
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
