Vedanta Sells 1.6% Stake in Hindustan Zinc as HZL Plans Rs 12,000 Crore Expansion
On June 18, 2025, Vedanta Ltd made headlines by selling a 1.6% stake in its subsidiary, Hindustan Zinc Ltd (HZL), through block deals. This move is expected to raise approximately Rs 3,018 crore. Meanwhile, HZL announced a bold Rs 12,000 crore investment to expand its operations in Rajasthan. These developments highlight strategic shifts for both companies in India’s mining sector.
Details of Vedanta’s Stake Sale
Vedanta offloaded 6.67 crore shares of HZL at a floor price of Rs 452.5 per share, a 7% discount from the previous closing price of Rs 485.95 on the National Stock Exchange (NSE). The deal, facilitated by DAM Capital and Citi, reduces Vedanta’s stake from 63.42% to about 61.82%. This sale aligns with Vedanta’s efforts to improve liquidity and address debt obligations, as noted by industry analysts. Last year, Vedanta sold a 1.51% stake in HZL, suggesting a pattern of gradual divestment while maintaining control.
Some reports, including one from CNBC-TV18, mentioned a potential Rs 7,500 crore stake sale. However, more recent sources confirm the deal was finalised at Rs 3,018 crore, indicating the higher figure may have been speculative or part of a larger plan not yet executed.
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Stake Sale Details |
Information |
|---|---|
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Stake Sold |
1.6% (6.67 crore shares) |
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Floor Price |
Rs 452.5 per share |
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Total Amount |
Rs 3,018 crore |
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Discount |
7% from Rs 485.95 |
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Brokers |
DAM Capital, Citi |
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Vedanta’s Stake (Pre-Sale) |
63.42% |
Hindustan Zinc’s Rajasthan Investment
HZL’s board approved a Rs 12,000 crore capital expenditure plan to establish a 250,000 tonne per-annum integrated zinc metal complex at Debari, Rajasthan. This project includes mining and milling infrastructure to boost production. The investment aims to double HZL’s capacity for zinc, lead, and silver, reinforcing its position as India’s largest integrated producer of these metals. This expansion is expected to enhance India’s self-reliance in critical minerals and create economic opportunities in Rajasthan.
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Investment Details |
Information |
|---|---|
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Location |
Debari, Rajasthan |
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Project |
Zinc metal complex (250,000 tonnes/year) |
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Total Investment |
Rs 12,000 crore |
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Goal |
Double production capacity |
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Components |
Mining and milling infrastructure |
Market Reaction
HZL’s shares fell by up to 7% in early trading on June 18, 2025, reaching a low of Rs 452.50. This drop reflects investor concerns over the block deal’s potential to dilute share value. Despite the sell-off, HZL’s market capitalisation remains robust at Rs 2.05 lakh crore, and its long-term growth prospects may attract investors.
Background on Vedanta and Hindustan Zinc
Vedanta Ltd, led by Anil Agarwal, is a global natural resources company with operations in zinc, aluminium, copper, silver, iron ore, and oil and gas. HZL, a flagship subsidiary, is India’s leading producer of zinc, lead, and silver, established in 1966. Privatized in 2002 when Vedanta acquired a controlling stake, HZL’s operations are primarily in Rajasthan, making it a vital part of Vedanta’s portfolio (Business Today).
Strategic Implications
Vedanta’s stake sale and HZL’s expansion reflect a dual strategy. Vedanta is streamlining its finances, likely to fund other projects or reduce debt, while HZL is investing in growth to meet rising global demand for metals. These moves could strengthen both companies’ positions in the competitive mining industry and contribute to economic development in Rajasthan.
The simultaneous announcements of Vedanta’s stake sale and HZL’s investment plans mark a pivotal moment for both companies. While Vedanta optimizes its financial structure, HZL’s expansion could enhance its market share and profitability. These developments underscore the dynamic nature of India’s mining sector and its role in the global economy.
Sources : Moneycontrol , Economic Times , NDTV Profit , CNBC-TV18
