HZL rises 13% as govt gets nod to sell stake

Aug 21 2013, 04:33 IST
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SummaryEven as the benchmark indices continued their downward move, shares of Hindustan Zinc (HZL) and two other Vedanta Group companies surged in the range of 9-16% on Tuesday on reports the government received legal clearances to sell residual stake in HZL as well as unlisted Bharat Aluminium (Balco).

Even as the benchmark indices continued their downward move, shares of Hindustan Zinc (HZL) and two other Vedanta Group companies surged in the range of 9-16% on Tuesday on reports the government received legal clearances to sell residual stake in HZL as well as unlisted Bharat Aluminium (Balco).

The HZL share gained 13.1%, or R13.75, to end at R118.75 per share, while Sesa Goa jumped 15.93%, or R20.70 — its biggest single-day gain in eight years — to end at R150.65. Sterlite Industries jumped almost 10%, or R7.5, to R83.2, thus helping the BSE metal index end higher by 4.8% from Monday's close. In contrast, the Sensex ended down 0.3%, or 61.48 points, to end at 18,246 after the 30-share gauge fell to its 11-month low of 17,970.98 earlier in Tuesday's session. Reports said the government is likely to initiate the stake-sale process for HZL and Balco after the Attorney General of India gave a 'go-ahead'. A legal view had been sought due to complex issues surrounding the stake sale in both the companies.

The government was looking to raise R14,000 crore by selling residual stake in companies like Hindustan Zinc as announced at the time of the Budget. Reports said the government is hopeful that Anil Agarwal-led Vedanta Group would buy the government's stake, for which the London-based company — the promoter entity of Sterlite and Sesa Goa — had offered to pay R17,275 crore ($2.7 billion) for HZL and Balco in early 2012.

During 2001-03, the government had sold majority stake in both HZL and Balco to Vedanta Group and saw its holding drop to 29.5% and 49%, respectively.

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