The Hindustan Zinc Share Price: Current State and Government Plans
The Indian government, which holds a 29% stake in Hindustan Zinc, is waiting for the share price to recover before attempting to offload the stake in tranches. Currently trading at around Rs321.30, the stock has seen a 7% rise in the last one year, when compared to the BSE Metals index increase of 29%. The Vedanta Group holds the majority of the stake, for about 64.9%.
With merchant bankers advising against a sale at the current market price, it is still unclear when the government will be able to carry out a successful divestment. It is likely that the government will only go ahead when Hindustan Zinc share price reaches its peak to ensure that the profits gained from the sell-off are maximized.
Until then, the government is likely to use other strategies to offset share price fluctuations and protect its stake in the company. For example, it could opt to undertake certain activities to improve the management and the performance of the company. Such activities may include introducing shareholder-friendly measures, ensuring corporate governance reforms, and improving the transparency of the company’s operations.
Furthermore, the government may opt to utilise long-term investments to further increase the value of its stake. For example, it could consider strategic investments in individual projects or in joint ventures with other companies. This could help Hindustan Zinc to enter new markets and increase its profitability.
Ultimately, the governments strategy will depend on external factors such as market conditions and the outlook of the Indian economy. However, if the Hindustan Zinc share price recovers to a good level, the government will be able to carry out a successful divestment.
