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Bond Market News
Vedanta to Offload 2.6% Hindustan Zinc Stake via OFS
August 14, 2024
Vedanta Ltd’s board has approved an offer for sale (OFS) of a 2.6% stake in its subsidiary Hindustan Zinc via the stock exchange. This would amount to about INR 65bn ($763mn). Business Standard notes that the OFS approval comes as a surprise as Vedanta until recently, was in talks to persuade the government to call for an OFS in Hindustan Zinc. As of June, Vedanta had 64.92% stake in Hindustan Zinc, with 29.54% being held by the central government. The OFS is expected to help Vedanta in its efforts to deleverage. As per analysts from Nuvama, Vedanta Resources has debt obligations of $1bn in the remaining part of FY 2025 which can be met via dividend and brand fee and another $417mn of inter-corporate deposits to be paid by December.
Separately, Vedanta’s plan to sell its steel business has been put on hold after it successfully completed a share placement (QIP) in July, easing its debt pressures as per sources. They added that environmental and regulatory concerns had also weighed on potential bidders to the steel deal.
Vedanta’s 9.25% 2026s were trading 0.4 points higher at 97.12, yielding 11.15%.
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