Hindustan Zinc Shares Slip 6% as Vedanta Offloads Stake in ₹3,300 Crore Block Deal

Shares of Hindustan Zinc Ltd (HZL) fell nearly 6% on Wednesday, 18th June, following a substantial block deal worth around ₹3,300 crore on the bourses. Market data indicates that approximately 2.44 crore shares, representing a 5.1% stake in the company, changed hands in early trade, with the transaction executed at an average price of ₹669 per share. As of 11:50 AM, the stock is trading at ₹457.70, with a decline of 5.89%.

The bulk of the selling pressure is attributed to parent company Vedanta Ltd, which was widely expected to offload part of its holding in Hindustan Zinc to address financial obligations. Though buyer identities remain undisclosed at the time of publishing, institutional interest was evident from the volume spikes on both NSE and BSE.

Vedanta’s Strategic Stake Sale to Aid Debt Reduction

Vedanta’s decision to divest a portion of its shareholding in Hindustan Zinc aligns with its broader strategy of deleveraging its balance sheet. As per reports, the Anil Agarwal-led conglomerate had planned a total stake sale worth up to ₹7,500 crore through multiple block deals.

The first tranche executed today marks a significant step in this process. Currently, Vedanta holds approximately 64.9% in Hindustan Zinc, and the Centre owns 29.5%. The promoter stake sale comes amid increased focus on liquidity management by the mining and metals conglomerate, which has faced persistent pressure from rating agencies to reduce debt.

Hindustan Zinc's Growth Ambition

As part of its two-fold expansion strategy, Hindustan Zinc plans to increase its integrated refined metal capacity by 250 kilotonnes per annum (ktpa), complemented by corresponding enhancements in its mining and milling capacities. This extensive project is anticipated to be completed within 36 months and carries an estimated total investment of approximately ₹12,000 crore.

Market Reaction: Stock Drops Despite Broader Stability

Following the deal, Hindustan Zinc shares declined 5.89% to ₹457.70 on the NSE before paring some losses. In comparison, the broader Nifty Metal index remained largely stable, signalling the stock-specific nature of the decline. Trading volumes surged to over eight times the 20-day average, indicating heightened investor activity and institutional churn.

Vedanta’s own shares also witnessed increased interest, reflecting optimism around its capital restructuring efforts. However, analysts remain cautious on the near-term outlook for HZL amid the overhang of potential further stake sales and pricing pressure from non-promoter exits.

Outlook

Market participants will be closely watching whether Vedanta proceeds with the full proposed stake sale and how this move shapes Hindustan Zinc’s stock trajectory in the coming weeks. The success of this capital-raising exercise could ease Vedanta’s refinancing requirements, but continued divestments may also weigh on sentiment for HZL in the short term.

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