Hind Zink Rockets On Divestment

Hindustan Zinc Ltd remained in the limelight today with 1 crore shares -- which represents almost 2.35 per cent of company's equity capital -- changing hands both on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) after the Cabinet Committee on Divestment (CCD) announced the sale of the metal PSU to Sterlite Industries for Rs 445 crore on Wednesday.

On the NSE, the stock hit a 52-week high of Rs 38.50 in intraday trades and ended at Rs 36.15. It rose by 2.84 per cent and more than 63.36 lakh shares changing hands. On the BSE, more than 27.72 lakh were traded. The stock was up by 3.14 per cent and ended at Rs 36.15.

Sterlite's bid for Hindustan Zinc Ltd, which was more than the reserve price of Rs 353.17 crore, translates into a price of Rs 40.50 per share.

Hindustan Zinc is a leading zinc manufacturer in the country and has six lead-zinc mines with a combined annual capacity of 3.49 million tonne, and 4 lead-zinc smelters with zinc capacity of 1,69,000 tonne and lead capacity of 43,000 tonne. It is the only integrated primary producer of zinc and lead in the country and accounts for 80 per cent of the zinc production in the country.

On the other hand, Sterlite Industries is a leading manufacturer of copper. Earlier it had acquired a stake in aluminium maker Balco from the government last year. The stock has been almost flat over the past few months following concerns that it might be delisted from the bourses.

Sterlite, in late December 2001, announced a buyback of up to 50 per cent of its equity capital at Rs 150 per share (payable Rs 100 in cash and the balance Rs 50 by allotment of 10 per cent secured non-convertible debentures). The scrip moved in a narrow range of Rs 120-130 since the beginning of calendar 2002.