The government of India did not accept Sterlite‟s Rs155bn offer to acquire its Hindustan Zinc (HZL) stake.
Standard Chartered said,
Our analysis indicates a buyout fair value of Rs175/share, ie, Rs218bn for the government stake. Even at this price, we believe the potential buyout will be positive for both Sterlite‟s and HZL‟s minority shareholders. Our fair value of Rs175/share is ~40% higher than HZL‟s current stock price. At this price our fair value of Sterlite will drop to Rs110/share. Note that we have used a 15% holding company discount to value Sterlite, whereas the actual dividend distribution cost works out to ~20%.
Sterlite and Anil Aggarwal is all set to become the Commodity King of India with interests from Iron Ore Mines, Aluminum, Zinc, Copper and now Oil.
