The government's stake sale in Hindustan Zinc seems to be stuck due to valuation issues. Sources close to the development said while a new valuer has been appointed, it could take at least three-four months, if not more, to submit its report. The government holds a 29.54 per cent stake in the Anil Agrawal-controlled company. Market players believe unless the stake sale is done before Diwali, the government may find it hard to get a good valuation. The delay has already caused a 13 per cent fall in the share price of HZL in the last two months.
Retail investor discount to go?
With the divestment season to kick off in the next few months, there are indications that the government may do away with the age-old practice of giving discounts to retail investors. Market sources say that investment bankers have proposed to the government that discounts end up providing arbitrage between actual price and retail investors' holding price. Consequently, many retail investors sell the shares in the open market for a quick buck. Investment bankers have suggested that instead of discounts, the government should give an annual loyalty bonus, much like the already-launched PSU exchange-traded fund, after one year. Sources said the government is looking at this proposal favourably.
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Analysts turn bullish on SBI, BoB
The June quarter results of PSBs indicate that there is some stability in operational performance. Although the quantum of stressed assets remains elevated, incremental NPA addition is stabilising. A pick-up in economic growth should see an improvement in asset quality and credit growth while margins should remain steady in the current financial year. Among PSBs, the Street prefers SBI and Bank of Baroda.
