Government to appoint merchant bankers for valuing Hindustan Zinc stake: report

Kick starting the process of its residual stake sale in Hindustan Zinc  Ltd (HZL), the government will appoint valuers to assess the worth of its stake in the company before auction, according to sources.

The Department of Disinvestment has invited bids from merchant bankers who would advise it in selling 29.54 per cent stake in the company, they said. The sources further said that the merchant bankers would have to suggest the timing of the open auction, conduct market survey and ensure best return to the government.

Last month, the Cabinet had cleared the stake sale in HZL through auction route.

The Prime Minister and the Attorney General were both of the view that the residual stake in HZL should be sold through through an open auction.

At the current price of Rs 125.25 apiece, HZL's stake sale would fetch the exchequer over Rs 15,500 crore. However, the final revenue realisation could be higher as its present owner Vedanta could pay a higher price for the 29.54 per cent stake.

During 2001-03, the government had sold majority stakes in the erstwhile PSU to the Vedanta group. At present, London-listed Vedanta holds a 64.92 per cent stake in HZL.

Last October, shareholders of Vedanta gave their nod to raise offers for acquiring the remaining government stake in HZL.

After shareholders' approval, Vedanta's board is now empowered to make an offer of up to Rs 21,636.56 crore for the remaining government stake in HZL.