Vedanta Limited has said it will sell 2.6% in Hindustan Zinc through an offer for sale of stocks, as per a stock exchange filing. This will take forward the sale of around 11 crore shares of Hindustan Zinc.
Hindustan Zinc has recently posted its first profit growth in six quarters, driven by firmer zinc prices and improving demand. The company reported a 19.4% year-on-year growth in net profit to ₹2,345 crore for the quarter ending in June. Within company segments, it is the zinc sale that stood as the most buoyant segment, showing a 14% year-on-year increase.
[I added] Hindustan Zinc shares have surged 84% the year, while the company’s market capitalization has doubled in the June quarter, mined and refined zinc production for the group both were at their all times highest level ever recorded in the same period.
Vedanta Limited’s Executive Director, Arun Misra, mentioned that both the aluminium and zinc divisions have seen sustainable excellence in performance and have outperformed the industry benchmarks, contributing to a reduction of 20% in costs, year on year.
As on June 30, the debt remaining in the books of Hindustan Zinc was ₹11,178 crore, of the Vedanta Group’s total consolidated debt of ₹78,016 crore. Vedanta has been looking to various fund-raising ways ahead of time to reign in this outstanding debt, and those entail a 2.6% stake sale in Hindustan Zinc to raise $2.5 billion and a recent ₹8,500 crore fund-raise via the Qualified Institutional Placement of shares. This strategic move is meant to be a part of the broader plan of Vedanta to pare down debt, which also includes the postponed plan of Vedanta to sell off its steel business.
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Source: Moneycontrol
News Desk
