Shares of Hindustan Zinc fell nearly 5% on Friday, June 6, to Rs 575.20 on the NSE, a six-week low, after Bloomberg reported, citing people familiar with the matter, that the government is planning an offer for sale (OFS) to divest up to 2% stake for approximately Rs 5,000 crore ($525 million). Vedanta, the controlling promoter, dropped 3% to Rs 318.80 in the same session.
DIPAM Eyes June or July for the OFS Launch
- DIPAM is targeting a June or July 2026 launch for the transaction
- Four banks are advising the government: ICICI Securities, Axis Capital, IIFL Capital Services, and HDFC Securities
- Deal size and exact timing could still change, no floor price has been announced
- If the November 2025 OFS discount precedent (~10%) holds, a floor price around Rs 517–520 per share is implied at current levels
- DIPAM, Hindustan Zinc, and the advising banks have not responded to requests for comment
The Last Exit, And Why This One Is Different
The government’s previous Hindustan Zinc OFS came in November 2025, when it sold 1.6% at Rs 505 per share, raising Rs 3,500 crore. Since then, the stock has appreciated roughly 24%. This round, if executed near current prices, would be the government’s most valuable Hindustan Zinc exit to date, fetching meaningfully more per share than any prior transaction.
That context matters. The Rs 5,000 crore target on a 2% stake implies a working price band of approximately Rs 575–595 per share. The government is not selling into weakness, it is selling into a stock that has run hard and doing so through a concentrated advisory mandate that signals serious execution intent.
Hindustan Zinc Shareholding Snapshot
| Shareholder | Stake (%) | As of |
|---|---|---|
| Vedanta (Promoter) | 60.71 | March 31, 2026 |
| Government of India | 27.92 | March 31, 2026 |
| Insurance Companies | ~3.50 | March 31, 2026 |
| Foreign Investors | 2.00+ | March 31, 2026 |
Check live: HINDUSTAN ZINC Share Price Chart: Live
A full 2% OFS would reduce the government’s stake from 27.92% to approximately 25.92%, continuing a multi-year pattern of gradual state exit from the company.
Where This Fits in India’s FY27 Disinvestment Push
The Hindustan Zinc OFS would be the fourth government disinvestment transaction of FY27 in rapid succession:
| Transaction | Stake Sold | Amount Raised |
|---|---|---|
| Central Bank of India OFS | 8.08% | Rs 2,266 crore |
| Coal India OFS | 2.00% | Rs 5,542 crore |
| NHPC OFS | Up to 6.00% | Rs 4,300 crore (est.) |
| Hindustan Zinc OFS (proposed) | Up to 2.00% | Rs 5,000 crore (target) |
| FY27 Total (post-HZL) | — | ~Rs 17,108 crore |
The government’s full-year FY27 disinvestment target is Rs 80,000 crore. Even after Hindustan Zinc, the total would sit at roughly Rs 17,108 crore, barely 21% of the annual goal. Significant further supply of PSU paper is lined up through the rest of the year.
ED Raid Overhang Added Pressure Earlier This Week
The OFS news compresses an already difficult week for the stock:
- On June 1–3, Enforcement Directorate teams visited offices of Vedanta and Hindustan Zinc in connection with a FEMA probe
- Vedanta confirmed the visits via exchange filing after NSE and BSE sought clarification
- The stock dropped roughly 1% on June 3 when the ED visit was first reported
- Searches concluded with no penalty or restriction imposed, Vedanta confirmed
- The FEMA probe itself remains active, Vedanta said material developments will be disclosed as required
Two separate negative catalysts in the same week, ED searches and a dilutive OFS report, is what pushed losses past 9% over five sessions.
Hindustan Zinc Share Price Performance
| Time Period | Return (%) |
|---|---|
| 1 Week | -9.0 |
| 1 Month | -6.0 |
| Year-to-Date 2026 | -6.0 |
| 1 Year | +17.0 |
| 3 Years | +87.0 |
| 5 Years | +72.0 |
Current market capitalisation: Rs 2.43 lakh crore. The stock’s 52-week high was Rs 717.10; Friday’s close of Rs 575.20 puts it 19.7% below that peak.
What the table shows clearly: the selloff is entirely a 2026 phenomenon. The three- and five-year investor is still sitting on substantial gains, but the current-year holder is down 6% before this week’s additional leg lower.
The Recurring Dilution Pattern
This is not the first time Hindustan Zinc has cracked on supply news. In June 2025, 76.1 million shares changed hands in a single block deal session; the stock fell 6% that day. The November 2025 government OFS at Rs 505 triggered its own correction. The pattern is now well established: announcement of any large block or OFS brings an immediate 5–8% discount-seeking move in the stock, regardless of underlying fundamentals.
For long-term holders, the story remains intact: India’s largest silver producer, a Rs 12,000 crore capex plan approved for 250 KTPA refined metal capacity expansion, and a consistent dividend track record. The overhang is structural, not fundamental.
DIPAM has not set a floor price for the Hindustan Zinc OFS. The next trigger to watch: an official exchange filing from Hindustan Zinc confirming the OFS open date, which under SEBI norms must come at least one trading day before the institutional bidding window opens.
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FAQ
Q: Why did Hindustan Zinc’s share price fall today, June 6?
The stock dropped nearly 5% to Rs 575.20 on NSE after Bloomberg reported the government is planning to sell up to 2% stake via OFS to raise Rs 5,000 crore, with DIPAM targeting a June or July 2026 launch.
Q: What is the government’s current stake in Hindustan Zinc?
As of March 31, 2026, the Government of India held 27.92% in Hindustan Zinc. A proposed 2% OFS would reduce that to approximately 25.92%, with Vedanta continuing to hold 60.71% as the dominant promoter.
Q: When is the Hindustan Zinc OFS date and floor price?
No floor price or confirmed OFS date has been announced yet. DIPAM is targeting June or July 2026. If historical OFS discount norms apply, the November 2025 sale used a ~10% discount; the floor price could be set in the Rs 517–520 range based on current market levels.
