Govt to sell stake in Balco, Hindustan Zinc through OFS

Business

The government is considering a proposal to use the offer for sale (OFS) route for selling its residual stake in Hindustan Zinc (HZL) and Balco. "It is a transparent mechanism that will allow for competitive bidding and ensure the best prices to the government," said a person familiar with the development.

The move would enable not only Vedanta Resources, which is the majority stakeholder of the two companies, but also ordinary investors to bid for shares. The finance ministry was earlier also considering using the e-auction route to sell its residual stake in the two firms.

The government currently holds 29.5 per cent stake in HZL and 49 per cent stake in Balco,but is planning to exit from both companies. The government had sold controlling stake in them between 2001 and 2003.

"There is little sense for the government to hold on to these two firms. A further disinvestment in them would also help raise much needed resources to finance the deficit," the official said. Early last year, Vedanta Resources had offered Rs 17,275 crore for the government's remaining stake in HZL and Balco.

The government's recent success in the OFS for disinvestment in public sector units is also one reason for the move. Apart from the ONGC issue last year, recent stake sales such as NMDC and the just concluded Oil India Ltd has found overwhelming response.

To make the OFS process more transparent, market regulator Sebi last month had allowed disclosing the indicative price throughout the trading session.

However a definite timeline for the stake sale has not been finalised. "It may happen this fiscal or it could be pushed to 2013-14," the official said.

Govt working towards IFCI stake sale

The government is readying a proposal to sell stake in the state-owned financial institution IFCI. The move comes soon after the company's board was restructured after four of its directors resigned from the board in late December.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views expressed in comments published on indianexpress.com are those of the comment writer's alone. They do not represent the views or opinions of The Indian Express Group or its staff. Comments are automatically posted live; however, indianexpress.com reserves the right to take it down at any time. We also reserve the right not to publish comments that are abusive, obscene, inflammatory, derogatory or defamatory.