Vedanta is planning to sell shares worth Rs 7500 crore of Hindustan Zinc, a subsidiary of the company, says a CNBC TV-18 report. In a block deal, the company could offer a discount of up to 10 percent on the last closing price of the share. Citi and DAM Capital are reportedly involved in the deal as brokers.
Hindustan Zinc, one of the biggest producers of ZInc and Silver in India, saw a 5.26 percent decline in its share price on Tuesday. The company’s share opened at Rs 506 on Wednesday morning and closed at Rs 485.95, Rs 27 down from the previous day’s close.
Hindustan Zinc has a market capitalization of Rs 2.05 lakh crores. Vedanta is the promoter and the biggest shareholder in the company, and has a shareholding of 63.42 percent. The Government of India is also a significant shareholder in Hindustan Zinc and has a 27.93 percent stake.
Hindustan Zinc’s capacity expansion
In another big development for Hindustan Zinc on Tuesday, the company announced an investment of Rs 12,000 crore to expand its metal smelting and refining operations at the Debari, Udaipur, facility. The company said that the investment will go towards setting up new metal smelters with 250 kilo tonnes capacity per annum.
Hindustan Zinc said the project will be completed in 36 months’ time. The announcement comes in line with the company’s plan to increase its capacity two-fold. As the company plans to add 250 kilo tonne capacity per annum to its existing capacity of 1,129 kilotonnes per annum, its capacity will be increased by 22 percent.
In the announcement, Hindustan Zinc said that it will finance the proposed Rs 12000 crore investment through Internal accruals and debt.