Government may sell its entire stake in Hindustan Zinc and ITC soon

23 May 2022 , 12:33 PM

Indian Government is considering selling its entire stakes in Hindustan Zinc and ITC. The government holds 29.4% stake in Hindustan Zinc and 7.9%  stake in ITC.  At the current market price of Hindustan Zinc, at around Rs 297.8 per share, the government’s stake is worth Rs 37,452 crore. At the prevailing market price of ITC at around Rs 275 per share, the government’s stake in it is worth Rs 26,522 crore.

The government is considering selling these stakes as part of its annual divestment plan. It has set the target to raise Rs 65000 crore from selling of its stakes in various companies.  Due to the economic slowdown, it has become even more important for the government to raise money through the divestment process. Tax collections of the government go down during times of economic slowdown. For instance, the excise duty cut announced on petrol and diesel yesterday will have an adverse impact on the government’s tax collection for the year. Excise duty is the indirect tax that the government charges on manufacturing and processing of certain goods. It is in order to protect its tax revenues that the government delayed the much-needed excise duty cut on diesel and petrol for so long.