Vedanta will sell up to a 1.59% stake in Hindustan Zinc, a move expected to raise around ₹45.9 billion ($500.8 million), as the conglomerate continues to shore up its balance sheet.
In an exchange filing on Tuesday, Vedanta said the shares will be sold through an offer for sale (OFS) at a floor price of ₹685 per share. That price represents a 5.8% discount to Hindustan Zinc’s closing price of ₹727.20 on Tuesday.
How the sale is structured
The OFS includes a base issue of 0.79% of Hindustan Zinc’s equity. If demand exceeds the base offer, Vedanta will exercise a greenshoe option to sell an additional 0.79%, taking the total stake sale to 1.59%.
The sale opens for non-retail investors on Wednesday, January 28, followed by retail investors on Thursday.
Current shareholding
As of December 31, Vedanta held a 61.84% stake in Hindustan Zinc. The Government of India remains the second-largest shareholder, owning 27.92% of the company.
Even after the sale, Vedanta will retain a clear majority stake in the zinc producer.
Part of a broader deleveraging push
This is not Vedanta’s first stake sale in Hindustan Zinc. The group has sold shares twice in the past two years, using the proceeds to reduce debt and improve liquidity.
Vedanta has been under pressure to strengthen its balance sheet amid high borrowing costs and large repayment obligations across its businesses, which span oil, gas, metals, and mining.
Market participants view the Hindustan Zinc stake sales as one of Vedanta’s most straightforward funding options, given the subsidiary’s strong cash flows and consistent dividends.
What it means for investors
The discount offered in the OFS could attract institutional demand, while retail participation will test appetite for the stock at lower levels. Analysts say the transaction is unlikely to alter Hindustan Zinc’s operations or dividend policy in the near term.
For Vedanta, the sale provides immediate capital without diluting control—an approach it is likely to continue as it balances growth plans with financial discipline.
News source: Reuters
Photo: NDTV
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