Hindustan Zinc stake sale: From Mumbai to New York, government holds roadshows to gauze investor sentiment

The government has conducted several roadshows in Mumbai, London, Boston and New York to meet investors for its proposed stake sale in Hindustan Zinc Ltd. The government is the largest minority shareholder in Hindustan Zinc (HZL) with a 29.5 percent stake in the country’s primary zinc manufacturer. 

“The roadshow is about the disinvestment process. So, the government is committed to disinvestment of some of its stake in Hindustan Zinc Ltd and in that to assess the market and meet investors and all that several roadshows have happened in the last 15 days. They have happened in Bombay, Singapore, Hongkong, London, Boston and New York. So, in all the major financial capitals the roadshows have happened,” Mines Secretary V L Kantha Rao said on the sidelines of a training-cum-workshop on the UNESCO Global Geoparks and Geoparks in India. 

The government had earlier said that it is committed to offloading its stake in the Vedanta Group firm through an offer for sale (OFS) and will take the decision on the disinvestment after testing the market. 

Speaking on the quantum of stake to be offloaded and the timeline, Rao said, “Let the roadshows be completed and then there is a proper mechanism and procedure on taking that decision. There is a committee and... so that committee will take that decision.” 

The Supreme Court in 2021 allowed the government to disinvest its residual stake in Hindustan Zinc in the open market. 

HZL has held fresh discussions with the government on a proposal to divide the company into two verticals, instead of three proposed earlier, CEO Arun Misra had said last week. The company’s restructuring plan to create separate entities was put on hold as the government had expressed resistance to the bid. 

Misra had said with regard to HZL’s demerger, the discussions happened very well with the government. He said that he met with the Mines Secretary recently and both the government and HZL are communicating on this subject which is “big”. 

The Mines Ministry had recently pointed out to the company that any restructuring of business operations would require the ministry’s clearance. 

Last month, the Vedanta group firm said its board has approved the second interim dividend of Rs 19 per share for the current financial year amounting to Rs 8,028.11 crore. 

HZL reported a 19.4 percent rise in Q1FY25 consolidated net profit at Rs 2,345 crore due to higher EBITDA (earnings before interest, tax, depreciation and amortization). It had posted a net profit of Rs 1,964 crore in the year-ago period. Income rose to Rs 8,398 crore from Rs 7,564 crore in the year-ago period. 

Hindustan Zinc is the world’s second-largest integrated zinc producer and the third-largest silver producer. The company supplies to more than 40 countries and has a share of over 75 percent of the primary zinc market in India.