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Hindustan Zinc Shares: Shares of Hindustan Zinc fell to a 5% lower circuit today. The government is selling up to 2% of its stake in the company. This will raise ₹5,000 crore.

Hindustan Zinc shares fell up to 5% today.

Hindustan Zinc: Shares of Hindustan Zinc saw a sharp decline of more than 5% today. Intra-day, the shares fell below their previous closing price, reaching a low of ₹570. There's a significant reason behind this drop in share prices. The government is preparing to sell up to 2% of its stake in Hindustan Zinc to raise approximately ₹5,000 crore from the market.

According to a Bloomberg report, the Department of Investment and Public Asset Management (DIPAM), under the Ministry of Finance, is expected to begin the stake sale process this month or in July. The government has also begun consulting with major merchant bankers, including ICICI Securities, Axis Capital, IIFL Capital Services, and HDFC Securities.

Current shareholding pattern

Hindustan Zinc is one of the country's largest zinc, lead, and silver producers. Anil Agarwal's Vedanta Limited holds approximately 61% of the company's stake, while the government holds approximately 28%. The government is selling 2% of this stake. This sale will be done through the Offer for Sale (OFS) route on the stock exchange.

impact on share prices

Hindustan Zinc shares fell sharply on Friday following this news. They fell nearly 5% to ₹570-575, their lowest level in two weeks. Shares of Vedanta Limited, Hindustan Zinc's primary promoter, also fell by approximately 3-5% today.

Reason for decline

Whenever the government introduces an OFS, it sets a floor price at a slight discount to the current market price of the shares. Anticipating this discount, the market begins selling in advance.