The scrips of IBP, Indian Petrochemical Corporation, Hindustan
Zinc Ltd and CMC have witnessed a northward journey during
the past two weeks following the government's move to
sell its residual stake in these already privatised companies.
banking sources close to the development said the centre
is planning to divest its residual stake in these firms
through a public offer. A decision in this regard will
be taken during the Cabinet Committee on Disinvestment
meeting scheduled on 3 October.
IBP scrip has appreciated over 11 per cent and closed
at Rs 753.3 on Wednesday from a low of Rs 675.75 on 1
September 2003. CMC has moved up to Rs 460.75 from a low
of Rs 448.9. IPCL has closed at Rs 156 while Hindustan
Zinc's scrip has witnessed a jump of around of Rs 10 and
closed at Rs 67.95 on the Bombay Stock Exchange.
scrip of Videsh Sanchar Nigam, however, lost Rs 3 at Rs
117.75 on Wednesday from the earlier close of Rs 121.35.
The government had sold its 45 per cent stake in VSNL
in the first round of divestment to the Tata group and
currently holds a residual stake of 26 per cent in the
government is planning to mobilise close to Rs 3,500 crore
from the sale of these shares, riding on a buoyant market
and strong economic fundamentals. At the current market
capitalisation, the government is expected to realise
Rs 1,370 crore from IPCL, Rs 182 crore from CMC, Rs 902
crore from VSNL and Rs 540 crore from Balco. Currently,
Balco is an unlisted entity controlled by Sterlite Industries.
government holds a residual stake of 49 per cent in Balco,
33.93 per cent stake in IPCL, 26 per cent each in the
Tata group controlled CMC and VSNL, 26 per cent in the
Indian Oil Corporation owned IBP and 49 per cent in Hindustan
familiar with the development say the centre has already
sought the consent of the original buyers to go ahead
with the public offering, The latter have the first right
of refusal on the residual shares. The government is also
planning to offer an option to the original buyers to
acquire up to 5 per cent of the residual shares from the
Industries has a 46-per cent stake in IPCL while Indian
Oil has a 53 per cent stake in IBP. Sterlite holds 26
per cent in Hindustan Zinc and the Tata group owns 45
per cent stake in VSNL and CMC. It is learnt that Reliance,
IOC and Sterlite have given their consent to sell the
shares in the open market. The offering will be through
a book-building process route with a fixed floor price.