India Considers Sale of Up to $525 Million Stake in Hindustan Zinc

India Considers Selling 2% Stake in Hindustan Zinc Ltd.

The Indian government is evaluating the sale of up to 2% of its stake in Hindustan Zinc Ltd. as part of a transaction that could raise as much as 50 billion rupees ($525 million), according to sources familiar with the matter.

The Department of Investment and Public Asset Management (DIPAM), which falls under the Finance Ministry, aims to initiate the process by this month or in July. ICICI Securities Ltd., Axis Capital Ltd., IIFL Capital Services Ltd., and HDFC Securities Ltd. have been enlisted to advise the government on the transaction.

While deliberations are ongoing, the details of the offering, including its timing and size, may still be subject to change. Government officials, Hindustan Zinc, and the banks involved did not immediately respond to requests for comment.

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The government has intensified efforts to boost revenue from the sale of stakes in state-owned assets. Last week, it raised approximately $531 million from the sale of a 2% stake in Coal India Ltd., India's largest coal producer. Earlier this week, India raised $450 million by selling a 6% stake in NHPC Ltd. The government is also planning an offering of a 2% stake in Life Insurance Corporation of India, which could potentially raise as much as 100 billion rupees ($1 billion).

The government last sold a 1.6% stake in Hindustan Zinc in November, generating approximately 35 billion rupees. The shares were priced at 505 rupees each. Since then, the stock has gained about 24%, increasing the value of the remaining holding. As of March 31, Vedanta Ltd., the company's controlling shareholder, owned 60.71% of Hindustan Zinc, while the government's holding stood at 27.92%, according to stock exchange filings.