Hind Zinc fall over 7% as govt to sell 2.5% stake via OFS

Shares of Hindustan Zinc on Wednesday fell by up to 7.5%, hitting a low of Rs 517.70 on the BSE, after the central government announced it would sell up to 2.5% of its stake in the company via an offer for sale (OFS).

The OFS includes a base offer of 1.25% stake, with a green-shoe option for an additional 1.25%. The floor price has been set at Rs 505 per share, which represents a 9.8% discount to Tuesday's closing price, making it negative for the stock in the short term.

Under the OFS, the government will sell approximately 5.28 crore shares, or 1.25% of the company's equity, with an additional oversubscription option of 1.25%.

Also read | Govt to sell up to 2.5% stake in Hindustan Zinc through OFS

The offer will open for non-retail investors on November 6, which is the T day, and they can indicate their willingness to carry forward any unallocated bids for T+1 day (November 7).

Retail investors can place their bids on November 7. The OFS regulations mandate that only retail investors and employees will be allowed to place bids on Thursday.

Hindustan Zinc, a subsidiary of Vedanta, is one of the world's largest integrated producers of zinc, lead, and silver. Headquartered in Udaipur, the company operates multiple mines and smelters, with a strong focus on sustainable mining practices, resource conservation, and maintaining its market-leading position in metal production.

In the September quarter, Hindustan Zinc reported a 35% jump in consolidated net profit to Rs 2,327 crore, compared to Rs 1,729 crore in the same period last year.

Revenue from operations for the quarter stood at Rs 8,004 crore, up 21% from Rs 6,619 crore in the corresponding quarter of the previous financial year.

Hindustan Zinc's shares have rallied 63% so far this calendar year.