Hindustan Zinc stake sale faces fresh hurdle due to restructuring plan

A corporate restructuring plan initiated by the board of Hindustan Zinc Ltd in September has cast a fresh shadow over the government?s bid to sell a part of its 29.54% stake in the miner through an offer for sale this fiscal. Any delay in the stake sale process could dent the Center?s disinvestment target of Rs, 51,000 crore for FY24. Billionaire Anil Agarwal controlled Vedanta Ltd holds 64.92% in HZL. At current prices, the government?s 29.54% stake in HZL is valued at Rs 37,532 crore. Senior officials have already said the government intends to dilute its stake in HZL in tranches over a period of time, as its shareholding remains substantial. This is the second time in about a year that the government?s plan to divest a portion of its stake in HZL through an OFS may run into delays. The government doesn?t typically announce OFS timelines in advance to prevent market speculation or manipulation. However, the HZL OFS was widely expected by the December quarter of this fiscal. In a meeting on September 29, the HZL board asked the company to explore creating separate legal entities for its three main businesses- zinc and lead, silver and recycling ? to unlock shareholder value. The board asked a committee of directors to evaluate the suggestions and recommend options and alternatives. A final call on the OFS will be taken by the government based on the HZL board?s decision.