Vedanta sets floor price at Rs 486 per share for HZL OFS, to offload up to 3.31% stake

Vedanta, the promoter firm of Hindustan Zinc Ltd (HZL), in a filing stated that its board committee has approved the sale of up to 14,00,00,000 equity shares of Hindustan Zinc Ltd, representing 3.31% of equity stake, through the offer for sale.

New Delhi: Mining conglomerate Vedanta will offload up to 3.31 per cent stake in Hindustan Zinc Ltd (HZL) through an offer for sale (OFS) from August 16-19 at a floor price of Rs 486 per share, according to a regulatory filing.

Vedanta, the promoter firm of Hindustan Zinc Ltd (HZL), in a filing stated that its board committee has approved the sale of up to 14,00,00,000 equity shares of Hindustan Zinc Ltd, representing 3.31per cent of equity stake, through the offer for sale.

Hindustan Zinc in a separate filing stated that Vedanta will offload up to 13.37 crore (13,37,44,856) equity shares, representing 3.17 per cent of the equity stake of the company through the OFS from August 16-19, 2024.

The floor price for the OFS has been fixed at Rs 486 per share, which is more than 15 per cent discount to Wednesday's close of Rs 572.95 on BSE. HZL shares closed 1.31 per cent lower on Wednesday.

At the floor price, the sale of 3.17 per cent stake will yield Rs 6,498 crore to the promoter Vedanta. At Wednesday's close, the OFS will garner Rs 7,663 crore to the promoter.

Vedanta Limited proposes to sell up to 5,14,40,329 equity shares representing 1.22 per cent of the equity share capital of HZL on August 16 (T day) to non-retail investors only, HZL said in the filing.

The promoter on August 19 proposes to sell an additional 8.23 crore shares representing 1.95 per cent equity to retail and non-retail investors in the event of oversubscription, according to the filing.

According to the filing, the OFS will open on Friday for non-retail investors. The issue will open for retail investors and non-retail investors who choose to carry forward their unallotted bids on Monday, August 19.

"The Offer is being undertaken by the seller, inter-alia, to gain access to funds for inter alia growth and expansion purposes and for optimisation of the capital structure of the company," Hindustan Zinc said.

Vedanta said it has raised the offer-for-sale size of Hindustan Zinc and will now offload 3.31 per cent stake in the company, representing up to 14 crore shares. The Vedanta board on Tuesday had approved the sale of up to 11 crore shares or 2.60 per cent stake in Hindustan Zinc through offer-for-sale (OFS).

At Wednesday's closing price of Rs 572.95 apiece on BSE, the sale of HZL's 14 crore shares will fetch Rs 8,021 crore for Vedanta.

At the end of the June quarter, Vedanta owned 64.92 per cent stake in HZL while the government had 29.54 per cent. Vedanta plans to demerge its aluminium, oil and gas, power, base metals, and iron and steel businesses into separate listed entities.

This demerger aims to reduce refinancing risks and reliance on dividends from Vedanta Resources Ltd.

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 at Rs 3,606 crore for the quarter ended June 2024. The company had posted a net profit of Rs 2,640 crore in the year-ago period. Income rose to Rs 36,698 crore from Rs 34,279 crore.

Last month, the mining conglomerate raised Rs 8,500 crore (over $1 billion) through Qualified Institutions Placement (QIP) of 19.31 crore equity shares at an issue price of Rs 440 per share.