Govt won't sell stake in Hindustan Zinc in 2013/14; stock slips over 4%

NEW DELHI: Hindustan Zinc Ltd slipped as much as 4.3 per cent in trade on Tuesday on reports that the government may not complete its sale of minority stakes in Hindustan Zinc Ltd and Bharat Aluminium ( Balco) this fiscal year, a finance ministry official said on Monday.

The government has proposed to sell all of its 29.5 per cent stake in HZL and its 49 per cent holding in Balco through open auction which were together expected to fetch about Rs 20,000 crore. The companies are majority owned by Anil Agarwal's Vedanta Group.

At 10:00 a.m.; Hindustan Zinc was trading 3 per cent lower at Rs 119.50. It hit a low of Rs 117.95 and a high of Rs 122 in trade today.

However, the "decision to disinvest in Hindustan Zinc and Balco stands", said economic af fairs secretary Arvind Mayaram, adding that the process requires time and may not be completed before March 31.

The government now expects to raise around 19,027 crore from asset sale which includes Rs 3,000 crore from the disposal of its Axis Bank holding. The government has so far managed to raise around Rs 3,500 crore from divestment proceeds.

The deferral of the stake sale in these companies has pushed up the disinvestment target for the next fiscal to Rs 51,925 crore - Rs 36,925 crore from regular asset sales and Rs 15,000 crore from residual stake sales.

The govt expects to get another Rs 12,500 crore in the next one month through the sale of stakes in companies such as Indian Oil Corporation (IOC), Hindustan Aeronautics Ltd (HAL) and from the proposed Central Public Sector Enterprises Exchange Traded Fund.

ONGC and Oil India will buy a 10 per cent government stake in IOC, which is expected to fetch around Rs 5,000 crore.