Vedanta to Sell 2.6% Stake in Hindustan Zinc; Plans Major Restructuring

On August 13, 2024, Vedanta announced that its board had approved the sale of up to 11 crore shares, or 2.6% of its stake, in Hindustan Zinc through an offer for sale (OFS).

“We wish to inform you that the duly authorised Committee of Directors of Vedanta Limited, at its meeting held today on August 13, 2024, has approved the sale of up to 11,00,00,000 equity shares of Hindustan Zinc, representing 2.60% of the issued and paid-up equity share capital of HZL, by way of an offer for sale through the stock exchange mechanism,” the company said in an exchange filing.

By the end of June, Vedanta owned 64.92% of Hindustan Zinc, with the government holding 29.54%.

Additionally, Vedanta plans to split its aluminium, oil and gas, power, base metals, and iron and steel businesses into separate publicly traded companies. This move aims to reduce refinancing risks and lessen reliance on dividends from Vedanta Resources Ltd (VRL).

Hindustan Zinc Q1 results

Hindustan Zinc recently reported its first profit increase in 6 quarters, thanks to higher prices and growing demand. Hindustan Zinc reported a 19% increase in consolidated net profit for the June quarter, reaching ₹2,345 crore, up from ₹1,964 crore in Q1FY24. The firm’s EBITDA rose to ₹3,951 crore in Q1FY25, compared to ₹3,348 crore in Q1FY24. The EBITDA margin improved to 48.6% from 45.98% a year earlier. Revenue from operations increased 11% year-on-year to ₹7,893 crore in Q1FY25.

Zinc sales also jumped 14% compared to the previous year, making it the company’s top business segment. Additionally, the company reached its highest-ever production levels for both mined and refined zinc in the June quarter.

About Hindustan Zinc Ltd

Founded in 1966, Hindustan Zinc is the world’s second-largest integrated zinc producer and the fifth-largest silver producer globally, with an annual production of about 714 tonnes. The company holds around 75% of the growing zinc market in India. Its headquarters is in Zinc City, Udaipur, and it operates zinc-lead mines and smelting complexes throughout Rajasthan.

On August 14, 2024, Hindustan Zinc Ltd’s share price opened at ₹562.00, touching the day’s high at ₹594.40, as of 12:10 PM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.