Vedanta chairman expects to buy stake in HZL, BALCO soon

Vedanta Resources chief Anil Agarwal said the company expects to pick up residual stakes in Hindustan Zinc and Bharat Aluminium Company (BALCO) at "market driven value" soon, banking on the Prime Minister Narendra Modi-led government's determination to go ahead with its disinvestment drive.

"This government is very determined to go ahead and sell the shares. They are working on it and this financial year they want to disinvest and get this money.

We are here to pay the right price and it is a very transparent process. We all abide by that," Agarwal told PTI about Hindustan Zinc (HZL) and BALCO.

Vedanta Resources, the London Stock Exchange-listed metal and mining conglomerate, holds 64.9 per cent stake in HZL and 51 per cent stake in Balco. It had offered over US $2.57 billion and US $296.5 million respectively to buy government's residual stakes in these two firms in January 2012.

In August 2012, Vedanta recieved approval form shareholders to raise the offer by around 25 per cent but the one-year approval period has expired.

"It has to be at a market driven value and in a most transparent manner. It is already there in the share purchase agreement. Very clear cut formula. So, they have to take a view (on) what they want to do," Agarwal said.

The billionaire claimed the previous government was "indecisive" but after his recent meeting with Finance Minister Arun Jaitley he was hopeful that the deal would be done soon and in a transparent manner. Agarwal had met Jaitley on December 24, 2014.

"For sometime the (previous) government was indecisive, which I am sure this government won't be. It creates a very wrong signal (if you are indecisive).

The shares were meant to be given, the whole idea was to disinvest. They had given us a time of five years to build up... Now it is ten years. I am very confident after meeting the Finance Minister and he was very confident that he will do it within this financial year," the Vedanta chairman said.

Agarwal said the "what happened in India" had not sent a good message to foreign investors.

"The foreign investor is not getting confidence and the most important thing is to creating stock value," he said.

Post disinvestment, HZL has grown five-fold from producing 0.17 million tonnes (MT) of metal to one MT. Silver production has also grown to 400 tonnes, making HZL the largest silver producer in the country. It also added a 474 MW thermal power plant.

HZL has infused Rs 12,000 crore investments in four expansions.

"The mine life which was about 5-7 years at the time of disinvestment is today of about 35 years," Agarwal said.

As per the company, it has paid royalty to the tune of over Rs 1,000 crore in 2013-14. HZL's turnover was Rs 1,470 crore in 2002 and rose to Rs 13,459 crore in 2013-14.