Vedanta Upsizes Hindustan Zinc Sale to Rs. 8,021 Crore

Vedanta has increased its offer-for-sale size of Hindustan Zinc, planning to sell up to 14 crore shares or a 3.31% stake in the company. At Wednesday's price, this could net Rs. 8,021 crore. Previously, Vedanta aimed to offload 11 crores shares. The decision is part of a demerger strategy to reduce refinancing risks.

In a strategic move on Wednesday, Vedanta announced it is raising the offer-for-sale size of Hindustan Zinc, intending to offload a 3.31% stake, or up to 14 crore shares.

The Vedanta board had initially approved the sale of 11 crore shares, representing 2.60% of Hindustan Zinc, on Tuesday.

The Committee of Directors at Vedanta Ltd sanctioned the increased sale in a meeting held on August 14, 2024. At Wednesday's closing price on the BSE, the 14 crore shares are estimated to fetch Rs. 8,021 crore.

In comparison, the sale of 11 crore shares would have yielded Rs. 6,302 crore. As of the end of June 2024, Vedanta held a 64.92% stake in Hindustan Zinc, while the Indian government owned 29.54%.

Vedanta's demerger initiative involves splitting its aluminium, oil and gas, power, base metals, and iron and steel businesses into separately listed entities. This is aimed at mitigating refinancing risks and reducing dependency on dividends from Vedanta Resources Ltd (VRL).

By June 30, 2024, Vedanta's net debt was Rs 61,324 crore. The company reported a 36.5% rise in consolidated net profit, totalling Rs 3,606 crore for the June 2024 quarter, up from Rs 2,640 crore in the same period the previous year. Revenue increased to Rs 36,698 crore from Rs 34,279 crore.

Last month, Vedanta successfully raised Rs 8,500 crore (over USD 1 billion) by issuing 19.31 crore equity shares at Rs 440 per share through a Qualified Institutions Placement (QIP).

(With inputs from agencies.)