Hindustan Zinc Ltd experienced a significant drop in its stock value, falling over 6% on Monday following a 9% decline on Friday. This decline coincided with the second day of the ongoing offer for sale (OFS) managed by promoter Vedanta. The shares hit a low of Rs 488.65 on the Bombay Stock Exchange (BSE), reflecting a total decrease of 20% over the past four days. This sharp decline is attributed to the floor price of Rs 486 per share for the OFS, which is set at a 15.17% discount from the previous closing price of Rs 572.95.
Currently, the OFS has seen varied levels of subscription. The non-retail portion has been fully subscribed at 111.11%, while the retail portion has only been subscribed to 27.09%. Shares of Vedanta, in contrast, saw a slight increase of 0.47%, reaching Rs 430.95.
On Friday, Hindustan Zinc indicated that Vedanta intends to exercise its oversubscription option, potentially increasing the offer by 1,21,65,562 equity shares, which represents 0.29% of the company’s total issued and paid-up capital. This is in addition to the base offer size of 5,14,40,329 equity shares, or 1.22% of the company’s capital. Consequently, the total offer size could reach up to 6,36,05,891 equity shares, representing 1.51% of the company’s total capital. Of this, 63,60,590 shares—equivalent to 10% of the offer—are reserved for retail investors on August 19, 2024, contingent upon valid bids.
Vedanta’s OFS is part of a strategic move to raise funds for growth, expansion, and capital structure optimization. If the oversubscription option is fully exercised, it would increase the total offer to up to 3.17% of the company’s issued share capital, translating to 13,37,44,856 equity shares.
