Shares of Hindustan Zinc on Wednesday went up to 7 percent following reports of the Cabinet approving the stake sale in the firm.

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The Cabinet approved the sale of the government's entire stake in Hindustan Zinc, people in the know said. The government holds a 29.5 percent residual stake in the company.

Following the report, the scrip touched an intraday high at Rs 317.3, up over 7 percent on the BSE.

Last week, CNBC-TV18 reported that there were no legal hurdles anymore for the government's Hindustan Zinc divestment and that the cabinet approval on the divestment of the residual stake would be soon. The offer size for this sale would be decided closer to the transaction because this is not a strategic disinvestment.

In 2002, the government had offloaded 26 percent stake in the company and the same was bought by the Vedanta Group, which later acquired additional stake in the firm to bring its holding up to 64.92 percent.

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The government's present selling round is part of its divestment objectives for this fiscal year.

The government has set its disinvestment target for the current fiscal year at Rs 65,000 crore. For the past few years, the government has not been able to achieve its divestment targets. It mopped up Rs 18,000 crore against the Rs 78,000 crore divestment target set for FY22. In FY21, the Centre achieved only 16 percent of the Rs 2.10 lakh crore divestment target set while in FY20, it mopped up 48 percent of the Rs 1.05 lakh crore.