Hindustan Zinc shares tank 8% as government to sell up to 2.5% stake via OFS; check details

The stake sale would fetch over ₹5,000 crore at the floor price.

The two-day OFS opens for institutional bidders today, and for retail investors, it will open on Thursday.

"Offer for sale in Hindustan Zinc Limited (HZL) opens tomorrow (Wednesday) for non-retail investors. Retail investors can bid on Thursday, 7th November. Government will divest 1.25% equity with an additional 1.25% as greenshoe option," Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said in a post on X.

The government is selling over 5.28 crore shares, or 1.25% stake, with a greenshoe option to retain additional subscriptions of similar amount.

The floor price is at a discount of 9.7% over Tuesday's closing price of ₹559.45.

The Government of India owns 29.54% of Hindustan Zinc, while Vedanta Limited owns 63.42%. LIC owns 2.76%, and mutual funds own 0.06%, as per available information. 

Earlier in August, Hindustan Zinc promoter Vedanta had proposed to sell up to 5,14,40,329 equity shares of the company to non-retail investors.

Vedanta had said that it would offer an additional up to 8,23,04,527 equity shares representing 1.95% of the equity capital as an oversubscription option to retail and non-retail investors on August 19. 

Vedanta had earlier stated that it would offload up to 14 crore shares, or 3.31% stake, in Hindustan Zinc Ltd (HZL) through an offer for sale (OFS) from August 16-19 at a floor price of ₹486 per share.

In 2024 so far, the stock of HZL has given a nearly 76% return, while in the past 12 months, the share price of the company has rallied 89%.