Hindustan Zinc OFS Oversubscribed 1.23 Times on Day 1

New Delhi, Aug 16 (PTI) The Offer for Sale of Vedanta group firm Hindustan Zinc Ltd received a strong response on Day 1, with non-retail investors placing bids for 6.3 crore shares, according to a regulatory filing.

According to the BSE data, total bids for 6,36,05,891 equity shares were received against 5,14,40,329 equity shares representing 1.22 per cent of equity on offer, resulting in over-subscription or 1.23 times or 137.39 per cent.

Bids were received at a price of Rs 494.54 per share against the floor price of Rs 486 per share.

Hindustan Zinc promoter Vedanta had proposed to sell up to 5,14,40,329 equity shares of the company to non-retail investors on Friday, August 16.

Vedanta had said that it would offer an additional up to 8,23,04,527 equity shares representing 1.95 per cent of the equity capital as an oversubscription option to retail and non-retail investors on August 19, Monday.

"We wish to intimate the stock exchanges of our intention to exercise the Oversubscription Option
in the Offer to the extent of 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 5,14,40,329 equity shares," Vedanta said in the filing.

"Accordingly, the total offer size will be up to 6,36,05,891 equity shares representing 1.51 per cent of equity capital," the filing said. Of these, 63,60,590 equity shares i.e. 10% equity shares of the offer would be reserved for allocation to Retail Investors, it added.

Vedanta had earlier stated that it would offload up to 14 crore shares or 3.31 per cent stake in Hindustan Zinc Ltd (HZL) through an offer for sale (OFS) from August 16-19 at a floor price of Rs 486 per share.

According to sources Vedanta will utilise the proceeds generated from the OFS for deleveraging its balance sheet and investment in its growth projects. This, coupled with the Rs 8,500 crore qualified institutional placement, will help bring down debt at the company as well as at the group level.

At the end of the June quarter, Vedanta owned a 64.92 per cent stake in HZL while the government had 29.54 per cent. Vedanta plans to demerge its aluminium, oil and gas, power, base metals, and iron and steel businesses into separate listed entities.

This demerger aims to reduce refinancing risks and reliance on dividends from Vedanta Resources Ltd. As of June 30, 2024, Vedanta's net debt stood at Rs 61,324 crore.

Vedanta reported a 36.5 per cent rise in consolidated net profit at Rs 3,606 crore for the quarter ended June 2024. The company had posted a net profit of Rs 2,640 crore in the year-ago period. Income rose to Rs 36,698 crore from Rs 34,279 crore.

Last month, the mining conglomerate raised Rs 8,500 crore through Qualified Institutions Placement (QIP) of 19.31 crore equity shares at an issue price of Rs 440 per share.