Centre shortlists six investment banks to assist in HZL stake sale

Centre is looking to sell its residual 29.5% in tranches through offer for sale mechanism

The Centre has shortlisted six merchant bankers to assist the government in offloading its 29.5 per cent residual stake in Hindustan Zinc in tranches. 

The merchant banks, which include ICICI Securities, SBI Capital Markets, HDFC Bank, IIFL Securities, Axis Capital and Citigroup Global Markets, will make presentations before an inter-ministerial group on August 12. Post the presentations, the selected merchant bank would be notified. 

The selected investment bank would have to assist the government on the timing and modalities of the divestment, conduct market survey, hold domestic and international road shows to generate interest among prospective investors, and seek regulatory approvals, among others. They will have to prepare a list of domestic and international investors to be approached by them within seven days.

The Centre is looking to sell its stake through the offer for sale mechanism. The government’s stake, as per closing price of shares on Wednesday, was over Rs 34,000 crore.

The selected merchant banker will also have to ensure that appropriate safeguards are in place to protect the government’s interest. The offer will have to be structured, keeping in consideration the provisions of shareholders’ agreement between the government and Vedanta group, signed in 2002, which had led to prolonged litigation.