Hindustan Zinc shares fall 8% as Vedanta OFS opens at discounted price
Hindustan Zinc (HZL) fell 7.8% to a day’s low of Rs 528 on the BSE on Friday, following the opening of Vedanta’s offer for sale (OFS) at a discounted floor price of Rs 486. The mining conglomerate, which is the promoter of HZL, is selling up to 3.31% of its stake, or 14 crore shares, from August 16-19.
Shares of Vedanta, which is expected to raise approximately Rs 6,498 crore from the OFS at the floor price, were trading 2% higher at Rs 430 on the BSE.
Vedanta is selling up to 5,14,40,329 equity shares, representing 1.22% of HZL’s equity share capital, to non-retail investors only on Friday. The remaining 8.23 crore shares, representing 1.95%, will be sold to both retail and non-retail investors in the event of oversubscription, according to an exchange filing.
The issue will open for retail investors and non-retail investors who choose to carry forward their unallotted bids on Monday, August 19.
«The Offer is being undertaken by the seller, inter-alia, to gain access to funds for inter alia growth and expansion purposes and for optimisation of the capital structure of the company,» Hindustan Zinc said.
At the end of the June quarter, Vedanta owned a 64.92% stake in HZL, while the government had 29.54%. Vedanta plans to demerge its aluminium, oil and gas, power, base metals, and iron and steel businesses into separate listed entities. This demerger aims to reduce refinancing risks and reliance on dividends from Vedanta Resources Ltd.
As of June 30, 2024, Vedanta’s net debt stood at Rs 61,324 crore.
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