Nilesh Shah: Hindustan Zinc shows what IDBI Bank's sale could achieve (opens the source in a new tab)
- Kotak AMC's Nilesh Shah says the government sold about 45% of loss-making Hindustan Zinc, with control, to Vedanta two decades ago for around ₹769 crore, and kept roughly 29%.
- Dividends on the stake it kept have exceeded the sale price, he says, and that stake is now worth over ₹62,000 crore, while the company became the world's largest integrated zinc producer.
- He contrasts IDBI, which stayed public, needed repeated capital top-ups and is valued at ₹90,000 crore, with ICICI, which went private and is worth ₹9.88 lakh crore.
- ₹769 cr
- Zinc stake sale, 20 years ago
- ₹62,000 cr+
- value of the stake kept
- ₹9.88 lakh cr
- ICICI's value today
Why it matters The "family jewels" argument says selling PSUs loses national wealth. Shah's answer is that keeping a minority stake lets the state share the upside of better management, which is exactly how the IDBI sale is built.
Other side One success picked with hindsight proves little: how much of Zinc's gain came from new owners and how much from its market? A bank holds public deposits, so its risks are different.