Hind Zinc may use NCD funds as dividends to help Vedanta delist: analysts

Firm raises Rs 3,520 cr despite firm being cash surplus; It cannot use the proceeds directly for parent company

Hindustan Zinc Ltd (HZL), a subsidiary of Vedanta Limited, has raised Rs 3,520 crore through issuance of non-convertible debentures (NCDs) which analysts feel could indirectly fund the delisting of Anil Agarwal-led metal and mining company. 

“HZL being a listed entity cannot raise funds and use it for its parent. It is against regulations. Moreover, since the Union government has a stake in Hindustan Zinc, the company board will also have a government official, which will not allow such transactions,” a senior analyst with a ratings agency said. 

Vedanta owns 64.9 percent stake in HZL, while the government has a residual stake of