One of the Blue chip stocks engaged in the production of zinc, lead, and silver has plunged by 7.63 percent after announcing the government of India proposed an offer for sale (OFS) of 10.56 crore equity shares, which is 2.5 percent stake of the company.
Stock movement
In Wednesday’s trading session, Hindustan Zinc Limited’s share plunged by 7.63 percent from the previous close of Rs. 559.45. The stock opened at Rs. 520.85 and is currently trading at Rs. 515.85, with a high of Rs. 523.60 and a low of Rs. 514.10. The market capitalization now stands at approximately Rs. 2,18,089.84 crore
What Happened
According to the filling of Hindustan Zinc Limited, the government of India, a part of the company holding proposed an offer for sale (OFS) of 10.56 crore equity shares, which is 2.5 percent of the company at the floor price of Rs 505 for nonretail investors.
Shareholding Pattern
In September 2024, Hindustan Zinc Limited had a majority stake held by the promoters at 63.42 percent, foreign institutional investors at 1.01 percent, domestic institutional investors at 3.12 percent, and the public at 2.92 percent. The government of India holds a 29.54% stake in Hindustan Zinc Limited.
On November 6, 2024, the government of India proposed an offer for the sale of 2.5% of their holding. Now, it has a 27.04 percent stake in Hindustan Zinc Limited.
Financial Performance
Coming into the financial analysis of Hindustan Zinc Limited’s revenue from operations has decreased by 15.14 percent from Rs. 34,098 crore in FY23 to Rs. 28,934 crore in FY24. The revenue of the company has grown at a CAGR of 11.74 percent over the last four years.
Hindustan Zinc Limited has diversified revenue from zinc by 62 percent, lead by 14 percent, silver by 19 percent, and other operation income by 5% in the financial year 2024.
The company’s net profit has decreased from Rs. 10,520 crore in FY23 to Rs. 7,787 crore in FY24, which has grown by 25.98 percent. The net profit of Hindustan Zinc Limited has grown at a CAGR of 3.43 percent over the last four years.
In terms of return ratios, Hindustan Zinc Limited’s share ROE and ROCE are currently at 55.2 percent and 46.2 percent, respectively. Titan Company Limited has a debt-to-equity ratio of 1.83x.
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Dividend
Hindustan Zinc Limited is recognized as one of the highest dividend stocks in India. The company consistently rewards its shareholders with substantial dividends, reflecting its strong financial performance and commitment to returning value.
Hindustan Zinc Limited has declared a second interim dividend of Rs. 19 per share for the financial year 2024-25, totaling Rs. 8,028 crore. This marks a significant payout, following a total dividend of Rs. 5,493 crore in the previous fiscal year. The company has maintained a dividend yield of 5.59 percent.
Company Overview
Hindustan Zinc Limited (HZL) is India’s largest and the world’s second-largest integrated producer of zinc, lead, and silver. As a subsidiary of Vedanta Limited, the company operates multiple mining and smelting facilities across Rajasthan and Uttarakhand. The company boasts a diverse portfolio, including five zinc-lead mines and several smelters, with a significant focus on sustainable practices.
Hindustan Zinc Limited has over 50 years of operational experience and prioritizes safety and environmental conservation. The company holds approximately 75% of India’s primary zinc market share and is the third-largest silver producer globally. HZL’s commitment to innovation drives its production capabilities, ensuring high-quality output while maintaining eco-friendly operations.
Written By – Nikhil Naik
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