Hindustan Zinc puts off demerger plans amid government opposition and Vedanta split
Vedanta-owned Hindustan Zinc Ltd, the country’s leading producer of zinc and silver, has put on hold its demerger plans.
Asked if demerger plans have been put on the back-burner, Arun Misra, CEO and whole-time director of Hindustan Zinc, told businessline, “Every good idea needs to find a right time. At present, there are various priority areas such as strengthening our presence in other metals, foray into critical minerals, demerger of parent Vedanta and so on.”
Objections from the government — a minority shareholder — the company will focus on creating and stabilising new verticals covering “other metals,” including precious ones like gold, copper and critical minerals.
Top priorities
According to Misra, the “immediate priorities” include efforts on shoring up the company’s presence in critical mineral mining that covers vanadium and tungsten. Other precious metals in focus include gold and copper mining.
This apart, the demerger of parent Vedanta is the priority. The Centre, which has over 27 per cent stake in Hindustan Zinc, may consider a second tranche of offer-for-sale soon, after which the demerger talks could be reconsidered.
In November, the Centre offloaded 1.6 per cent of its stake in the company.
The company has a market cap of over ₹18,000 crore.
Over the last few quarters, the company has bid for critical mineral and other mineral blocks in India, aiming to ramp up its presence in non-zinc mining activities.
“It takes some three to five years to develop these mines and commence operations. So maybe somewhere down the line, we could look at zinc & lead, silver, copper and other metal segments,” he said.
Previously, Hindustan Zinc had proposed the setting up of three different entities covering zinc, lead and silver and recycling operations, but the plan faced objections from the Centre . Plans were reworked to have two entities, which again faced resistance, citing that the company was “profitable and performing well as a single entity”.
For Q3FY25, Hindustan Zinc reported a revenue of ₹8,614 crore, an increase of 18 per cent y-o-y, with a profit after tax of ₹2,678 crore, up 32 per cent. Free cash flow from operations (pre-capex) stood at ₹2,628 crore.
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