Cabinet okays 29.5% sale in Hind Zinc, may get Rs 38,000 crore

NEW DELHI: In a fresh push to disinvestment, the Union Cabinet on Wednesday approved the sale of the government’s residual stake of 29.5% in Hindustan Zinc (HZL) which may help raise much-needed revenues of nearly Rs 38,000 crore. The move came even as top officials suggested that the Centre will push for the privatisation of two state-run lenders.

The Cabinet Committee on Economic Affairs (CCEA) approved the sale, which may be through the offer for sale route and will be managed by the department of investment and public asset management (Dipam). HZL is now a subsidiary of Anil Agarwal’s Vedanta Ltd, which owns 64.9% in the company. In 2002, the then Atal Behari Vajpayee-led NDA government sold 26% of its stake in HZL to Sterlite Opportunities and Ventures (SOVL) for Rs 445 crore.

Sterlite had then acquired another 20% from the open market, raising its stake to 46%. In 2003, Sterlite bought another 18.9% stake in HZL to emerge as the majority shareholder. The Centre had decided in 2012 to divest its residual 29.5% stake in HZL but it got bogged down with delays.

In February this year, the Supreme Court had allowed the residual stake sale after the Centre accused the CBI of presenting fundamentally wrong facts regarding HZL’s disinvestment during the Vajpayee government’s tenure and had said that the investigative agency had misled the apex court to direct registration of a fresh FIR for probe into alleged irregularities.

The latest decision to move ahead with the stake sale will also help the government inch closer to the disinvestment target for the current fiscal year set at Rs 65,000 crore. Several high profile sales such as the privatisation of BPCL has been put on the back-burner for now due to lack of interest.