Hindustan Zinc share price tumble over 7% - Here is why

Hindustan Zinc Share Price NSE: Vedanta's board approved the sale of Zinc International assets held by THL Zinc Ventures Ltd (THLZV), a direct wholly-owned subsidiary of the metals and mining major.

Vedanta holds a 64.9 per cent stake in Hindustan Zinc Limited (HZL) and its integrated zinc operations hold 80 per cent market share in India’s primary zinc market. Pic: Reuters

Hindustan Zinc Share Price NSE: Shares of Hindustan Zinc on Friday, January 20, tumbled nearly 7 per cent amid concerns over an increase in royalty fees to Vedanta Limited. The company while releasing its Q3 results, also announced to acquire Vedanta's international zinc assets for $2,981 million. The company posted a 20 per cent decline in consolidated net profit to Rs 2,156 crore.

Shares of Hindustan Zinc on ended at Rs 353.70 on NSE after tumbling 6.32 per cent. A subsidiary of Vedanta Limited, Hindustan Zinc will pay a 2 per cent royalty of its consolidated revenue i.e., Rs 590 crore.

Market expert and Zee Business panellist Ambareesh Baliga said that the royalty hike is a negative news for the company. He added that the company's cash on book will be affected.

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Vedanta's board approved the sale of Zinc International assets held by THL Zinc Ventures Ltd (THLZV), a direct wholly-owned subsidiary of the metals and mining major.

The assets held by THLZV through THL Zinc Ltd (Mauritius) comprising shares held in Black Mountain Mining Pty Ltd, South Africa (69.6 per cent) and THL Zinc Namibia Holdings (Pty) Ltd (100 per cent), Namibia, will be sold to the proposed wholly-owned subsidiary (SPV) of Hindustan Zinc Ltd (HZL) for a cash consideration not exceeding USD 2,981 million, Vedanta's filing said.

Also, read- Hindustan Zinc Dividend 2023 News: Check amount, record date and payment date | Hindustan Zinc Q3FY23 Results

Hindustan Zinc Q3 Results

The company reported a 20 per cent decline in consolidated net profit to Rs 2,156 crore for in its Q3 earnings on the back of higher expenses and lower revenue.

The company posted a consolidated net profit of Rs 2,701 crore in the year-ago period, Hindustan Zinc said in a filing to BSE.

The company's consolidated revenue from operations in the October-December period dropped to Rs 7,628 crore from Rs 7,841 crore in the year-ago period.

Hindustan Zinc Share Price History

Hindustan Zinc stock has delivered a return of more than 25 per cent in last six months. The stock's 52-week range is Rs 383.00 - Rs 242.05. At current levels, the company has a market cap of Rs 1.49 lakh crore.

Hindustan Zinc

Vedanta holds a 64.9 per cent stake in Hindustan Zinc Limited (HZL) and its integrated zinc operations hold 80 per cent market share in India’s primary zinc market.

The government has a shareholding of 29.5 percent in Hindustan Zinc.

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