Vedanta garners Rs 3,100 crore from Hindustan Zinc OFS

Billionaire Anil Agarwal’s Vedanta fell short of meeting its initially targeted proceeds from an offer for sale (OFS) in group entity Hindustan Zinc, with the exercise netting ₹3,100 crore for the resources conglomerate that had first sought to garner up to ₹6,500 crore in stake dilution but later reduced the OFS size.

Vedanta sold 63.6 million shares of Hindustan Zinc in a two-day OFS that concluded on Monday. The promoter, Vedanta, initially aimed to raise up to ₹6,500 crore by divesting a 3.17% stake.

The natural resources company held a 64.92% stake in the zinc company as of June and offloaded a 1.5% stake through the OFS on Friday and Monday.

Shares of Hindustan Zinc have plunged nearly a fifth since last Monday, wiping out more than ₹50,000 crore in market vale.

Vedanta had initially said that it would sell 51.4 million shares of Hindustan Zinc, with the option to additionally sell up to 82.3 million shares in case of oversubscription. After the sale of the 51.4 million shares, on Friday, the company reduced the green shoe option from 82.3 million to 12.2 million shares.A Vedanta spokesperson, in an email response, stated that the OFS was significantly oversubscribed. “In line with best-in-class capital markets practices, the success of an offer is evaluated by the response a company receives on its base offer size. The green shoe option is provided to ensure greater flexibility.”Vedanta will use the OFS proceeds for the capital expenditure, sources said. Vedanta had set the floor price for this stake sale at ₹486 a share. On Monday, its shares closed at ₹495.70 on the NSE, down nearly 5% from the previous close. A clearing price of ₹487 was fixed for non-retail bidders.Between Friday and Monday, the shares are down more than 13%. The shares had hit a lifetime high of ₹807.70 earlier this year. Shares of its parent Vedanta had also hit a lifetime high of ₹506.75 earlier this year.