Vedanta Sells 2.60% Stake in Hindustan Zinc Amid Strategic Demerger Plans

Vedanta Ltd has approved selling up to 11 crore shares (2.60%) in Hindustan Zinc via an offer for sale (OFS). The demerger of its various business sectors aims to reduce refinancing risks. As of June 2024, Vedanta’s net debt was Rs 61,324 crore, and it reported a 36.5% rise in consolidated net profit.

On Tuesday, Vedanta Ltd’s board gave the green light to sell up to 11 crore shares, representing a 2.60% stake in Hindustan Zinc, through an offer for sale (OFS).

The company has not disclosed the floor price or date of the OFS. According to a regulatory filing, Vedanta’s Committee of Directors approved the decision in its August 13, 2024 meeting.

Vedanta currently holds a 64.92% stake in Hindustan Zinc, with the government owning 29.54%. The move aligns with Vedanta’s strategy to demerge its aluminium, oil and gas, power, base metals, and iron and steel businesses into independent entities, aiming to reduce refinancing risks and dependence on dividends from Vedanta Resources Ltd (VRL).

By June 30, 2024, Vedanta’s net debt stood at Rs 61,324 crore. The company reported a 36.5% increase in consolidated net profit, reaching Rs 3,606 crore for the quarter ending June 2024, compared to Rs 2,640 crore in the same period last year. Its consolidated income grew to Rs 36,698 crore from Rs 34,279 crore year-on-year. In a recent financial move, the conglomerate raised Rs 8,500 crore through a Qualified Institutions Placement (QIP) of 19.31 crore equity shares at Rs 440 per share.