NEW DELHI: Vedanta Ltd has fixed the floor price for Offer for Sale (OFS) of Hindustan Zinc Ltd (HZL) shares at Rs 486 a piece, which is at 15% discount to the current market price of Rs 576.
The company has increased the OFS size to 14 crore shares (or 3.31% of total outstanding shares) from the earlier announced 11 crore shares (2.6%). Vedanta Ltd, which holds 64.92% in HZL, would raise minimum Rs 6,804 crore (at the floor price of Rs 486) through the OFS. The OFS opens for subscription on August 16, when non-retail investors can submit their bids. The offer closes on August 19, 2024, the day retail investors can submit their applications.
Hindustan Zinc recently reported its first profit growth after six consecutive quarters of decline, with a 19.4% rise in net profit to Rs 2,345 crore in the April-June quarter. The company’s zinc sales saw a 14% increase in the first quarter, making it the top business segment.
Recently, Vedanta Limited received approval from 75% of its secured creditors to proceed with its proposed demerger. The demerger is planned as a simple vertical split, where for every 1 share of Vedanta, shareholders will receive 1 share of each of the 5 newly listed companies.
The company stated that Vedanta has a track record of delivering strong returns to its shareholders. As of June 2024, its total shareholder return over 5 years stood at 276%, while 5-year average accumulated dividend yield was 65%, delivering value for shareholders.