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.
Sources said the government is now finalising a proposal to this end. “It is an option before the government and would help the company’s growth,” said an official. The government currently holds 55.57 per cent stake in IFCI after its board approved the conversion of Rs 923 crore worth of optionally convertible debentures issued to the government into equity shares at par. ENS