Hindustan Zinc shares slump 6% following block deal

Shares of Vedanta’s subsidiary, Hindustan Zinc (HZL), slumped 6 per cent on Wednesday after 7.2 crore shares changed hands via block deals.

Reports suggested that promoter Vedanta was likely to divest 1.6 per cent stake in its subsidiary through block deal for around $350 million, impacting 6.67 crore shares at a floor price of ₹452.50 — which is a 7 per cent discount to Tuesday’s closing price on the NSE. Vedanta held 63.42 per cent stake in HZL by the end of March 2025 quarter.

Hindustan Zinc on Tuesday disclosed that its board approved investing ₹12,000 crore to expand its integrated refined metal capacity by 250 kilo tonnes per annum.

Despite measuring the new capex plan as a cheerful step resulting in volume growth visibility, brokerages were divided.

Nuvama Institutional Equities emphasised that the announcement is a long-term growth enabler. However, the near-term earnings are contingent on commodity prices only. It has reiterated reduce rating at an unchanged target price of ₹403.

“We reckon the incremental investment at full capacity utilisation has potential to deliver an RoE of 18 per cent,” it said.

The growth capex may lead to a lower dividend payout, Nuvama added.

JM Financial analysts maintained a positive stance on HZL given its presence in the lower end of the global cost curve facilitated by high-grade captive mines sufficient to meet requirements for decades, 100 per cent captive power plants, sizeable scale, diversified revenue stream with increasing contribution from silver sales.

The brokerage has retained buy rating at an increased target price from ₹530 to ₹550 per share.

Shares traded 5.96 per cent lower on the BSE at ₹457.40 as at 11.54 am, hitting an intraday low of ₹455.35. Follow Live Updates here

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Published on June 18, 2025