Hindustan Zinc OFS base price set at Rs 486; 15.2% below firm's last close

Share sale by Vedanta to fetch Rs 6,500 cr

Hindustan Zinc on Wednesday announced a floor price of Rs 486 per share for the offer for sale (OFS). The floor price is 15.2 per cent below its last closing of Rs 573 on the BSE.

Through the OFS, promoter Vedanta plans to offload up to 3.17 per cent stake, or 133.7 million equity shares. At the base price, the OFS will fetch Rs 6,500 crore. The OFS will take place on Friday for non-retail investors and on Monday for retail investors, who have reservations of 10 per cent of the shares on offer. A total of 133.7 million shares are on offer.

At the end of June 2024, Vedanta had a 64.92 per cent stake, while the central government held 29.54 per cent in Hindustan Zinc, which is currently valued at Rs 2.42 trillion. Cash positive, Hindustan Zinc is the country’s largest producer of zinc.

The Anil Agarwal-led Vedanta and UK parent Vedanta Resources (VRL) have embarked on a drive to reduce their debt.

In June, Finsider International, a unit of VRL, sold a 2.6 per cent stake in domestically-listed Vedanta to mobilise Rs 4,184 crore, which was used to pare its debt. At the end of June, Vedanta's net debt was Rs 61,324 crore, and gross debt stood at Rs 78,016 crore. As of March 31, VRL’s debt levels stood at around $6 billion.

In July, Vedanta also raised Rs 8,500 crore (nearly $1 billion) in fresh capital, issuing 193.1 million new equity shares at an issue price of Rs 440 apiece through the qualified institutional placement route.

Global rating agency S&P Global Ratings upgraded VRL’s rating to 'B-' (a stable rating) from 'CCC+' at the end of July, citing improving capital structure and liquidity.

The rating agency said in its research update that the stable outlook reflected its view that the company would proactively address the maturity of $1.2 billion of debt in April 2026.