Government To Divest Up To 2.5% Stake In Hindustan Zinc Via Offer For Sale

The Ministry of Mines has announced plans to offload up to a 2.5% stake in Hindustan Zinc Ltd. through an offer for sale.

The offer will open for non-retail investors on Nov. 6 and for retail investors on Nov. 7.

The floor price for the OFS has been set at Rs 505 per share, indicating a 9.8% discount to Tuesday's close, according to an exchange filing on Tuesday.

As the promoter of Hindustan Zinc, the government will sell up to 5.28 crore equity shares of a face value of Rs 2 each for a base offer of 1.25%, the company's exchange filing stated.

The OFS includes a base offer of 1.25% stake, with a greenshoe option of an additional 1.25% share.

In case the oversubscription option is not exercised, the equity shares forming part of the base offer size will hereinafter be referred to as offer shares through a separate, designated window of BSE Ltd. and the NSE Ltd.

The offer will be undertaken exclusively through the seller's brokers named below on a separate window provided by the stock exchange for this purpose.

Brokers on behalf of the seller include Axis Capital Ltd., IIFL Securities Ltd., HDFC Securities Ltd., and ICICI Securities Ltd., while IIFL Securities Ltd. will also act as a settlement broker.

Shares of Hindustan Zinc closed 2.91% higher to Rs 559.65 apiece, compared to a 0.90% advance at the benchmark NSE Nifty 50.

It has risen 87.11% in the last 12 months and 75.96% on a year-to-date basis. The total traded volume in the day stood at 2.60 times its 30-day average. The relative strength index was at 60.83.

One out of the 12 analysts tracking the company has a "buy" rating on the stock, two recommend a "hold," and nine suggest a "sell," according to the Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 26.9%.