Hindustan Zinc Shares Drop 8% as Govt Launches 2.5% Stake Sale via OFS

6 Nov 2024 , 10:47 PM

Hindustan Zinc Ltd., a Vedanta unit, saw its shares drop by up to 8% on Wednesday, November 6, after the government announced plans to sell up to 2.5% of its stake through an offer for sale (OFS). The OFS includes an initial 1.25% divestment with an option to sell an additional 1.25% if demand allows.

A floor price of ₹505 per share has been set, marking a 10% discount to the prior day’s closing price, with potential proceeds of ₹5,300 Crore if fully subscribed. The OFS opened for non-retail investors on Wednesday and will open for retail investors on Thursday, following the standard bidding process.

At the time of closing on November 6, 2024 shares of Hindustan Zinc Ltd closed at ₹514.85 which is a 8.01% dip than the previous close. Hindustan Zinc Ltd stock has gained a total of 73% in the last one year, and 61% gain since the beginning of the year.

Investors can place multiple bids in an OFS, provided they have the full bid amount in their demat account, and bids can be adjusted throughout the trading day.

The final allocation is declared at the end of the day, and any excess funds are refunded, similar to the IPO process. The Vedanta Group holds a 63.42% stake in Hindustan Zinc, while the government retained a 29.5% share as of the September quarter.

This OFS follows a previous stake sale by Hindustan Zinc’s promoters, the Vedanta Group, in August. In October, CMD Arun Misra mentioned the government’s intention to proceed with the OFS soon.