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Vedanta Limited, a major player in the mining and natural resources sector, has announced an Offer for Sale (OFS) to divest a 2.6 per cent stake in Hindustan Zinc, equivalent to 11 crore shares. This move, detailed in a stock exchange filing, is part of Vedanta’s strategy to manage its investments and financials.
Hindustan Zinc has recently achieved a financial turnaround, reporting its first profit growth after experiencing six consecutive quarters of decline. For the April-June quarter, the company’s net profit surged by 19.4 per cent year-on-year, reaching ₹2,345 crores. Additionally, the sales of zinc increased by 14 per cent compared to the same period last year, marking it as the top-performing segment for the company.
The company’s share price has risen significantly this year, climbed 84 per cent and doubled its market capitalization during the June quarter. Hindustan Zinc also achieved record levels of mined and refined zinc production during this period.
Vedanta’s aluminium and zinc divisions have consistently surpassed industry benchmarks, showcasing a 20 per cent year-over-year reduction in overall costs. Despite these positive developments, Hindustan Zinc’s debt stood at ₹11,178 crore as of June 30, contributing to Vedanta Group’s total consolidated debt of ₹78,016 crore.
In its bid to reduce its substantial debt, Vedanta is working to secure $2.5 billion. The company has recently halted plans to divest its steel business and redirected the funds from a Qualified Institutional Placement (QIP) of shares, totalling ₹8,500 crores, towards settling debts with Oaktree Capital, Deutsche Bank, and Union Bank of India.