Hindustan Zinc plummets 6% as promoter Vedanta plans further stake sale

Shares of Hindustan Zinc plunged 6 per cent at Rs 488.65 per share on the BSE in Monday’s intraday trade. The share price of the company has fallen 21.43 per cent in the last five trading sessions. 

The stock price dipped after the company’s promoter, Vedanta decided to further offload a 0.29 per cent stake in the company through its ongoing offer for sale (OFS). 

Vedanta, the promoter of Hindustan Zinc, had planned to exercise the green shoe option to sell an additional 1.95 per cent equity in its Offer For Sale (OFS), which will open to retail investors on Monday.

Earlier the company had plans to sell up to 5,14,40,329 equity shares, representing up to 1.22 per cent of the total issued and paid-up equity share capital of the company on August 16, 2024 for non-retail investors only, and on August 19, 2024 for retail investors and non-retail investors who choose to carry forward their unallotted bids from T-day. 

Apart from this the company had kept an additional option to sell up to 8,23,04,527 equity shares representing 1.95 per cent of the total issued and paid-up equity share capital of the company, in case of oversubscription. The total equity shares from both the Base Offer Size and the Oversubscription Option will represent 3.17 per cent, the company had said. 

“We wish to inform the Stock Exchanges of our intention to exercise the Oversubscription Option in the Offer by up to 1,21,65,562 equity shares, representing 0.29 per cent of the total issued and paid-up equity share capital of the company, in addition to the 5,14,40,329 equity shares, representing 1.22 per cent of the equity forming part of the Base Offer Size. Consequently, the total offer size will be up to 6,36,05,891 equity shares, representing 1.51 per cent of the total equity of the company),” the company said in an exchange filing on Friday. 

The offer is being undertaken by Vedanta to access funds for growth, expansion, and optimization of the capital structure.

The company in an exchange also revealed that it has received an order from the Office of the Commissioner of Central Excise and CGST Commissionerate confirming a penalty of Rs 99,36,210 along with Tax demand and applicableInterest. 

The issue pertains to reversal of Input Tax Credit of inputs/input services used for effecting exempted and non-GST supply during FY 2019-20and 2020-2, the company said. 

The company also received a similar order from the same office confirming Penalty of Rs 14,84,228 along with Tax demand and applicable Interest. The issue pertains to utilisation of Input Tax Credit on the expenditure incurred on CSR activities during FY 2019-20.

The company has total market capitalisation of Rs 2.08 trillion. Its shares are trading at a price to earnings multiple of 26.87 times with an earning per share of Rs 19.35. 

At 10:32 AM; the stock of the company was trading 4.70 per cent lower at Rs 495.50 per share on the BSE. Meanwhile, Vedanta was trading 1.53 per cent higher at Rs 435.50 per share By comparison, the BSE Sensex was flat, down 0.03 per cent at 80,409.47 levels.