Hindustan Zinc is up 7% on news of a government stake sale

Hindustan Zinc's stock jumped 7% on Wednesday after media reports claimed the company's equity sale had been approved by the Cabinet.

The government would sell its whole share in Hindustan Zinc, according to ET Now,citing sources. It owns 29.54 percent of the zinc-producing company. As of now, the shareholding is worth Rs 39,385.66 crore.

The stock rose 6.81 percent to Rs 315.90 following the news.

Hindustan Zinc was a government-owned enterprise with a controlling stake. In 2002, the government sold a 26% share in the company to Vedanta Group, who acquired it. The Group later bought further shares in the company, bringing its total interest to 64.92 percent.

The latest round of sales is part of the government's financial year's divestment goals. It's also possible to sell a stake in ITC, where it owns 7.91 percent. The terms of an offer for sale (OFS) and the scope of the divestiture are still being finalised. According to an earlier report from ET, the government expects the procedure to be completed by September.

The government has been obliged to investigate other possibilities because to the delays in the strategic sales of Pawan Hans, Shipping Corporation of India (SCI), IDBI Bank, and Bharat Petroleum Corporation Ltd (BPCL), as well as the scaled-down public offer of Life Insurance Corporation (LIC) of India.

The government has set a disinvestment target of Rs 65,000 crore for FY23. LIC's public offering earlier this month raised roughly Rs 20,560 crore.