In a bid to push for the sale of its residual stake in Hindustan Zinc Ltd (HZL), the country’s largest zinc miner, the Mines Ministry is planning to conduct international roadshows in “key investor markets” such as Singapore, the US and London.
According to a senior official from the Ministry, it is yet to be decided whether the entire stake - of over 29 per cent – will be off-loaded at one go, or if a tranche-wise approach will be taken up.
Factors like investor interest in the mining sector- post the recent Supreme Court order allowing state governments to have retrospective royalty on mineral mining; existing market conditions at the time of OFS (offer-for-sale), and the response to on-going OFS by Hindustan Zinc by majority owner - Vedanta Group will be considered.
“We will start with the international roadshows soon, primarily to gauge investor interest. These would be the usual markets like Singapore, London, the US, may be Hong Kong and so on,” the official told businessline.
According to the official, some roadshows – in India and overseas – were held “last year”; and these included places like Abu Dhabi, Singapore, London and Mumbai. Some virtual ones took place targeting markets like the US and Hong Kong. However, the Lok Sabha elections slowed down the disinvestment plan “but it was not put-off”.
“In the current global economic scenario it needs to be seen what sort of investor interest will HZL’s OFS generate,” the official said. Domestic roadshows have been carried out already.
In its annual report for FY24, the zinc-miner mentioned that non-deal roadshows by DIPAM (Department of Investment and Public Asset Management) along with Hindustan Zinc’s management have “concluded”. The company maintains regular dialogue with the Government, extending complete collaboration.
Earlier, the Centre had off-loaded around 40 per cent stake in the company in two tranches – once in 2002-03 and in 2003-04.
While the Mines Ministry holds 29.54 per cent stake and has three directors on board the zinc miner, billionaire mining baron Anil Agarwal-controlled Vedanta owns the majority stake at 64.92 per cent. Public shareholding is around 5.54 per cent. Anil Agarwal’s daughter, Priya Agarwal Hebbar, is the Chairman of HZL.
Demerger Plans
The official also confirmed that a two-company demerger plan of HZL– one for zinc and lead and a second for silver – have been shared with the Mines Ministry.
Previously, a three entity structure was proposed by the Vedanta Group company. This included one for zinc and lead, a second for silver and a third recycling unit with each to be listed separately. The proposal was shot down by the Mines Ministry citing profitability concerns of such individual companies.
“Yes a revised proposal for demerger has been submitted. We are discussing it internally. We will soon have a meeting with HZL on this,” the official said.
Separation of the silver unit (from the existing single company structure) could lead to an additional market capitalisation of $3 - 4 billion, explained the company’s top management.