Despite the news that the stake sale in Hindustan Zinc might be put on hold, shares of the metal company and Vedanta Resources, which owns more than 64 percent in the company, gained around 1 percent each on March 13.
At 9:24am, shares of India’s largest integrated zinc producer were trading at Rs 305.6, up 0.3 percent, on the BSE. In the past one year and year-to-date, Hindustan Zinc’s stock has given a negative return of 3 and 5 percent. Vedanta shares were up 1.2 percent at Rs 283.25 on the BSE.
The Indian government may put a plan to sell part of its stake in Hindustan Zinc on hold unless the company calls off the nearly $3-billion cash acquisition of two Vedanta Group subsidiaries, Reuters said, citing a senior government source.
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The government is the largest minority shareholder in Hindustan Zinc with a 29.54 percent stake in the company, while Vedanta owns 64.9 percent. The London-headquartered company is keen to pick up 6 percent more in the zinc producer when the government dilutes its holding.
In January, the Hindustan Zinc board approved buying Vedanta Group's zinc businesses for $2.98 billion. “Investors need certainty about the deal and till a finality is reached, the government may not go ahead with its planned offer for sale,” Reuters quoted a source as saying.
In February, the government opposed Vedanta’s proposal to sell its international zinc business to Hindustan Zinc for $2.98 billion over valuation concerns.
Hindustan Zinc, a subsidiary of Vedanta Group company, is engaged in mining and smelting of zinc, lead and silver. The company commands 80 percent market share in India’s primary zinc market and has world’s largest underground zinc mining operations at Rampura Agucha.
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