Prashant Pathak
Vedanta Sells 1.6% Stake in Hindustan Zinc for Over ₹3,000 Crore to Cut Debt
In a significant strategic move, Vedanta Limited has decided to sell 1.6% of its stake in Hindustan Zinc Ltd (HZL) through a block deal, aiming to raise approximately ₹3,028 crore. This transaction is part of the company’s broader effort to manage its debt and raise capital for upcoming business needs.
✅ What the Deal Involves
According to market sources, Vedanta plans to offload nearly 66.7 million shares of Hindustan Zinc. The floor price for the sale has been set at ₹452.19 per share, which is slightly below the previous trading price. This pricing strategy appears to be designed to ensure smooth execution of the block deal in current market conditions.
✅ Why Vedanta Is Selling the Stake
One of the primary reasons behind this stake sale is Vedanta’s ongoing strategy to reduce its debt burden. As part of its broader restructuring plans, the company is seeking to optimize its balance sheet and generate sufficient liquidity to fund capital expenditures and other operational requirements.
Importantly, even after this transaction, Vedanta will continue to remain the majority stakeholder in Hindustan Zinc, although its ownership will decline from 63.4% to around 61.8%.
✅ Past Stake Sales and Government Involvement
This isn’t the first time Hindustan Zinc shares have been offloaded recently. Notably, the Indian government also sold 2.5% stake in the company in November 2023, raising about ₹3,449 crore through an Offer For Sale (OFS). That sale too was a part of the government’s disinvestment program.
✅ Impact on Hindustan Zinc Share Price
While such strategic divestments are often seen as positive for companies in the long term, short-term market reactions tend to be mixed. Following the announcement, Hindustan Zinc’s share price showed slight volatility, which is a typical market response to large-scale block deals.
✅ What This Means Going Forward
With the proceeds from the sale, Vedanta is expected to strengthen its financial position and maintain healthy capital reserves for future expansion and operational activities. Additionally, the move underscores the company’s focus on financial discipline, especially in a challenging global economic environment.
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