Balco stake sale: Govt may use SME platform

NEW DELHI: The government may use Sebi’s institutional trading platform (ITP) — meant for easier fund raising by SMEs and start-ups — to sell its remaining stake in Balco, where it had divested its majority stake to Anil Agarwal’s Sterlite Industries over a decade ago.
The platform was created a few years ago to facilitate the exit of venture funds and private equity funds and allowed listing of companies without an IPO.
Senior officials told TOI that the disinvestment department had taken up the issue of selling government shares in Balco in the market but its problems were compounded as the company, where 51% stake was sold for Rs 551 crore in 2000-01, is unlisted. The government is keen to avoid selling shares directly to the Vendanta group and had sought Sebi’s advice.
Although a formal decision is yet to be taken, Sebi, officials said, is veering around to the view that ITP could provide a solution, although it is not clear how the framework meant for SMEs can be used for a large company, whose valuation would run into thousands of crores. “It’s a viable proposition but we are yet to hear from Sebi,” said an official, who did not wish to be identified. Sebi officials remained non-committal on the regulator’s stance.
As part of its disinvestment programme, the government is looking to sell its remaining stake in Balco and Hindustan Zinc, where Sterlite is the majority shareholder. Balco is proving to be a problem, as HZL is listed and the government can easily opt for the stock exchange route to sell its remaining 49.9% stake.
A final decision is expected in the coming weeks as the valuation exercise for both companies is currently underway.