Shares of Vedanta’s subsidiary, Hindustan Zinc (HZL), slumped 7 per cent on Wednesday after Vedanta offloaded stake worth ₹3,023 crore.
Promoter Vedanta sold 6.67 crore shares of HZL to institutional investors by way of an accelerated bookbuild process, representing 1.6 per cent of the issued ordinary share capital, as per stock exchange disclosure.
“As we actively progress towards the demerger of Vedanta into sector focused entities across diverse verticals, this capital raise will help de-leverage the balance sheet and enhance financial flexibility, enabling each of the demerged entities to pursue their independent growth plans,” Vedanta said in a statement.
Reports suggested that promoter Vedanta was likely to divest stake at a floor price of ₹452.50 — which is a 7 per cent discount to Tuesday’s closing price on the NSE. Vedanta held 63.42 per cent stake in HZL by the end of March 2025 quarter.
In a separate filing, Vedanta said its board has approved the first interim dividend of ₹7 per equity share for FY25-26. Record date is fixed as June 24, 2025.
Hindustan Zinc on Tuesday disclosed that its board approved investing ₹12,000 crore to expand its integrated refined metal capacity by 250 kilo tonnes per annum.
Despite measuring the new capex plan as a cheerful step resulting in volume growth visibility, brokerages were divided.
Nuvama Institutional Equities emphasised that the announcement is a long-term growth enabler. However, the near-term earnings are contingent on commodity prices only. It has reiterated reduce rating at an unchanged target price of ₹403.
“We reckon the incremental investment at full capacity utilisation has potential to deliver an RoE of 18 per cent,” it said.
The growth capex may lead to a lower dividend payout, Nuvama added.
JM Financial analysts maintained a positive stance on HZL given its presence in the lower end of the global cost curve facilitated by high-grade captive mines sufficient to meet requirements for decades, 100 per cent captive power plants, sizeable scale, diversified revenue stream with increasing contribution from silver sales.
The brokerage has retained buy rating at an increased target price from ₹530 to ₹550 per share.
Shares of Hindustan Zinc ended 6.89 per cent lower on the BSE at ₹452.90 after hitting a low of ₹451.50 against previous close of ₹486.40.
Vedanta stock dipped 0.54 per cent to end at ₹456.40.