Vedanta stock rises 1.5% on plans to unload 2.6% equity in Hindustan Zinc via Offer For Sale

Bloomberg reported that Vedanta was planning to raise $2.5 billion to help reduce the group's staggering debt.

Vedanta stock rose 1.5 percent on August 14 after the company's board gave a greenlight to plans of divesting a 2.6 percent stake or 11 crore shares in subsidiary Hindustan Zinc through an offer-for-sale.

On the other hand, shares of Hindustan Zinc fell more than 2 percent after Vedanta revealed its plans for a partial stake sale.

At 09.24 am, shares of Hindustan Zinc were trading at Rs 568.30 on the NSE while Vedanta was at Rs 426.60.

As per Hindustan Zinc's latest shareholding data, the government held a 29.54 percent stake while Vedanta owned a 64.92 percent stake in the company.

The news of the stake sale comes after Bloomberg reported that Vedanta is planning to raise $2.5 billion to help reduce the group's staggering debt. The company recently halted plans to sell its steel business, as per the Bloomberg report, after securing Rs 8,500 crore through a Qualified Institutional Placement (QIP) of shares.

Back in July, Moneycontrol reported that Anil Agarwal's Vedanta intends to use the QIP proceeds to repay its debts to Oaktree Capital, Deutsche Bank, and Union Bank of India.

Hindustan Zinc reported a debt of Rs 11,178 crore as of the end of the June quarter, which has taken the Vedanta Group's consolidated debt to a staggering Rs 78,016 crore.

Hindustan Zinc recently posted its first profit growth after six straight quarters of decline, driven by higher prices and increasing demand. The company’s net profit for the April-June quarter surged 19.4 percent year-on-year to Rs 2,345 crore. Zinc sales, its leading business segment, saw a 14 percent year-on-year increase in the first quarter. The group also achieved its highest-ever mined and refined zinc production during the June quarter.