Hindustan Zinc OFS: Govt to sell 2.5% in Vedanta subsidiary to raise over ?5,000 crore

The Indian government plans to divest up to 2.5% of its stake in Hindustan Zinc (HZL) through an Offer for Sale (OFS) at ?505 per share, with the sale potentially raising over ?5,000 crore. The OFS will open for institutional bidders on November 6, 2024, and for retail investors on November 7. The stake sale includes 1.25% equity, with an additional 1.25% greenshoe option. At ?505, the floor price is 9.7% lower than HZL’s previous closing price of ?559.45.

Vedanta, the parent company, had also announced in August that it would sell up to 2.6% of HZL shares via OFS, with dates to be set later. For Q2 FY25, Hindustan Zinc reported a 35% year-on-year profit increase, reaching ?2,327 crore, supported by higher zinc prices and reduced power costs through renewable energy usage. Revenue in zinc/lead grew to ?6,403 crore, and in silver to ?1,550 crore. The company also invested in renewable energy with a ?327 crore investment in Serentica Renewables, boosting its renewable power share to 14% during the quarter.