Relaxed OFS norms pave way for govt's HZL stake sale

Sebi allowed non-promoters with more than 10% stake in the company to tap OFS route

Capital market regulator Sebi today allowed non-promoters of listed companies to tap the Offer for Sale (OFS) route, a move that paves the way for government to divest its residual stake in Hindustan Zinc Ltd.

In its board meet today, Sebi allowed non-promoters with more than 10 per cent stake in the company to tap OFS route.

"In any company where there is a non-promoter and that entity holds more than 10 per cent, they will be covered," Sebi Chairman U K Sinha said in response to a query related to government's plan to sell stake in Hindustan Zinc (HZL).

The government currently holds 29.54 per cent stake in HZL and has already initiated the process of fresh valuation of the erstwhile PSU to push through the long pending stake sale in the current financial year.

Besides, Sebi also allowed top 200 companies by market capitalisation to tap the OFS route.

Earlier, the OFS mechanism was open only to promoters of top 100 listed companies for diluting or offloading holdings and meet the minimum 25 per cent public shareholding norm.

HZL shares closed at Rs 160.65, down 3.31 per cent, on the BSE. With a market capitalisation of Rs 67,880 crore, the government's 29.54 per cent stake in HZL would fetch about Rs 20,000 crore.

The Cabinet had in January cleared the selling of the residual stake in HZL.

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

In the current fiscal the government has budgeted to collect Rs 15,000 crore through selling residual stake in private companies, which includes HZL and Balco.