Vedanta estimated to have raised Rs 3,200 cr from OFS of subsidiary HZL

Mining conglomerate Vedanta Ltd is estimated to have raised around Rs 3,200 crore from the offer for sale (OFS) of subsidiary Hindustan Zinc Ltd.

The offer for sale (OFS) of Vedanta group firm Hindustan Zinc Ltd received a strong response from retail and institutional investors, sources said.

Vedanta is estimated to have received around Rs 3,200 crore from the OFS, they said.

Vedanta will utilise the proceeds generated from the OFS for deleveraging its balance sheet and investment in its growth projects. This, coupled with the Rs 8,500 crore qualified institutional placement, will help bring down debt at the company as well as at the group level.

Base issue size for retail investors was 51.44 lakh shares while total retail subscription is 93.82 lakh shares, or 1.8 times of the base issue size.

For institutional investors, the base issue was 4.62 crore shares while total institutional subscription is 6.36 crore, or 1.4 times, sources said, adding that the total shares sold through OFS is 6.3605 crore.

The company's proposed demerger is also on track, with the company filing a composite scheme of arrangement with the NCLT after receiving a go-ahead from 75 per cent of its secured creditors as well as NoCs from the stock exchanges.

The scheme envisages demerger of Vedanta's existing business into six independent listed companies that will house its aluminium, oil and gas, power, steel and ferrous metals, base metals and other existing businesses.

The demerger is planned to be a simple vertical split, for every one share of Vedanta Ltd, the shareholders will additionally receive one share of each of the five newly listed companies.

In a filing to the BSE, Vedanta said, "That pursuant to the sale of 63,605,891 equity shares of face value of Rs 2 each held by us in our subsidiary, Hindustan Zinc Ltd (representing 1.51 per cent of the total issued and paid-up equity share capital of the company), by way of an offer for sale through the stock exchange mechanism held on August 16, 2024 and August 19, 2024... our shareholding in the company has become 63.42 per cent."

As of June 30, 2024, Vedanta's net debt stood at Rs 61,324 crore.

Vedanta reported a 36.5 per cent rise in consolidated net profit to Rs 3,606 crore for the June quarter. The company had posted a net profit of Rs 2,640 crore in the year-ago period.

Its income rose to Rs 36,698 crore from Rs 34,279 crore.

Last month, the mining conglomerate raised Rs 8,500 crore through qualified institutional placements of 19.31 crore equity shares at an issue price of Rs 440 per share.