Vedanta Limited has announced its decision to sell a 2.6% stake in Hindustan Zinc through an Offer For Sale (OFS). This move will involve offloading 11 crore shares, as stated in a recent stock exchange filing.
Key Points
- Stake Sale Details: Vedanta plans to reduce its shareholding in Hindustan Zinc by 2.6%, representing 11 crore shares, through an OFS. This decision is part of the company’s ongoing strategy to manage its investments and reduce debt.
- Hindustan Zinc’s Performance: Hindustan Zinc has recently seen a turnaround, reporting its first profit growth after six quarters of decline. The net profit for the April-June quarter rose by 19.4% year-on-year to Rs 2,345 crore. The company’s zinc sales also increased by 14% in the same period, making it the top-performing segment.
- Stock Performance: The shares of Hindustan Zinc have surged by 84% this year, effectively doubling the company’s market capitalization during the June quarter. This growth is attributed to higher zinc prices and increased demand.
- Production Highlights: Hindustan Zinc achieved its highest-ever mined and refined production of zinc during the June quarter. The company’s aluminium and zinc divisions continue to outperform industry benchmarks, with a notable 20% year-over-year reduction in overall costs.
Debt and Fundraising Efforts
Vedanta Group is working on reducing its consolidated debt, which stood at Rs 78,016 crore as of June 30. Hindustan Zinc alone reported a debt of Rs 11,178 crore. To address this, Vedanta has been exploring various fundraising options, including a $2.5 billion plan. The company recently raised Rs 8,500 crore through a Qualified Institutional Placement (QIP) of shares and decided to put its steel business sale on hold.
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