In a surprise move, Anil Agarwal-promoted Vedanta Ltd said its board has approved an offer for sale (OFS) for its 2.6 per cent stake in Hindustan Zinc (HZL) through the stock exchange mechanism.
In a statement to the exchanges, the company said, “The Committee of Directors of Vedanta has approved the sale of up to 11 crore equity shares of Hindustan Zinc, representing 2.60 per cent.”
The statement added that the sale would be an offer for sale through the stock exchange mechanism.
As of June, Vedanta held 64.92 per cent in Hindustan Zinc, with another 29.54 per cent stake in the company.
In Tuesday’s trade, Hindustan Zinc closed at Rs 586.35 per share on the stock exchanges. At Tuesday’s share value, an OFS for a 2.6 per cent stake would bring Vedanta around Rs 6,449 crore.
Vedanta’s decision comes as a surprise as the company, until recently, was in talks to persuade the Central government to call for an OFS in Hindustan Zinc.
Vedanta and its parent, Vedanta Resources, have been attempting to deleverage their books for the last couple of years. In a more recent move, the India-listed entity raised Rs 8,500 crore through the qualified institutional placement (QIP) route, which the company’s executives noted would be instrumental in further deleveraging the balance sheet and reducing finance costs.
As of June, Vedanta’s net debt was at Rs 61,324 crore, and gross debt was at Rs 78,016 crore. As of December 2023, Vedanta Resources’ gross debt was at $14.7 billion, and net debt was at $12.5 billion. Vedanta Resources’ management has shared guidance to reduce debt by $3 billion in the next three years.
Analysts with Nuvama, in an August 7 report, noted, “The parent (Vedanta Resources) has debt (including interest of $420-430 million) obligations of USD 1 billion in the rest of FY25. This can be met via dividend and brand fee. The above debt repayment does not include inter-corporate deposits of $417 million from Vedanta, which need to be paid by December.”
First Published: Aug 13 2024 | 6:22 PM IST