Hindustan Zinc drops after reports Supreme Court stays govt divestment

Hindustan Zinc dropped 0.14% to Rs 138.50 at 15:20 IST on BSE after reports the Supreme Court stayed a fresh proposal to divest 29.5% stake in the company by the Central government.

Meanwhile, the S&P BSE Sensex was up 280.86 points or 1.16% at 24,469.23.

On BSE, so far 28,305 shares were traded in the counter as against average daily volume of 65,965 shares in the past one quarter. At the day's low of Rs 137.70 hit so far during the day, the stock fell 0.72%. The stock was volatile. At the day's high of Rs 141.70, the stock rose 2.16%. The stock had hit a 52-week low of Rs 117.20 on 25 August 2015. The stock had hit a record high of Rs 190.40 on 19 February 2015. The stock had outperformed the market over the past one month till 18 January 2016, sliding 4.74% compared with Sensex's 5.22% fall. The scrip had also outperformed the market in past one quarter, declining 9.76% as against Sensex's 11.12% fall.

The large-cap company has equity capital of Rs 845.06 crore. Face value per share is Rs 2.

As per reports a bench led by chief justice T.S. Thakur said there can be no disinvestment of Hindustan Zinc by the government without the Supreme Court's permission. The court was hearing a plea filed by the National Confederation of Officers' Association, an employee union against proposed divestment.

The apex court is also probing into suspected irregularities in Hindustan Zinc's stake sale to Vedanta (earlier called Sesa Sterlite) by the government in 2002. No divestment can happen in a public sector undertaking without the Parliament amending the concerned statute, the court reportedly said. Referring to the earlier sale of 29.5% to Vedanta, the court told the government the sale was circumvention of law.

Attorney general Mukul Rohatgi, however, told the court that the government has already lost its majority stake after the 2002 divestment and does not require parliamentary sanction. The court reportedly has granted the government four weeks to file documents.

Hindustan Zinc's net profit rose 4.7% to Rs 2285.26 crore on 4.2% growth in net sales to Rs 3908.28 crore in Q2 September 2015 over Q2 September 2014.

Hindustan Zinc is a subsidiary of Vedanta (formerly known as Sesa Sterlite), a part of London listed Vedanta Resources plc, a global diversified natural resources company. The company is one of the largest integrated producers of zinc-lead and a leading producer of silver.

As per the shareholding pattern, Vedanta holds 64.92% stake and the Government of India holds 29.54% stake in Hindustan Zinc as at 30 September 2015.

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