Hindustan Zinc 2026: Govt may sell 2% for ₹5,000 cr

The headline

India is considering selling as much as a 2% stake in Hindustan Zinc Ltd in a transaction that could raise up to ₹5,000 crore ($125 million), according to people familiar with the matter. The plan is being worked on by the Department of Investment and Public Asset Management (DIPAM), which functions under the Finance Ministry. People cited in the report said the process could be launched this month or in July, though the final structure is not yet locked. The proposed deal is part of a broader set of government stake-sale discussions happening across listed public-sector holdings.

DIPAM’s plan and the likely window

DIPAM is looking at a sale of up to 2% in Hindustan Zinc, but deliberations are still ongoing. The people familiar with the matter said details such as timing and size could change. If executed at the indicated scale, the deal would be one of the larger recent secondary sales linked to the company. The report describes the information as private, which is why the sources asked not to be identified.

The timeline cited is near-term, with the process potentially starting this month or in July. That puts the transaction within the current planning cycle for stake sales, where execution depends on market conditions and internal approvals.

Advisors on the proposed government sale

The government is being advised by four brokerages on the Hindustan Zinc transaction, according to the same set of sources. These include ICICI Securities Ltd., Axis Capital Ltd., IIFL Capital Services Ltd., and HDFC Securities Ltd. The presence of multiple advisors typically supports structuring options and execution planning, including potential routes such as market-based sales.

While the article does not specify the route for the government’s proposed sale, it notes that the timing and size may be adjusted before launch.

What happened in the last government stake sale

The government last sold a 1.6% stake in Hindustan Zinc in November, raising about ₹3,500 crore. Shares in that sale were priced at ₹505 each. That reference point offers context on how the government has previously accessed liquidity from its holding.

The earlier sale also highlights that divestments in Hindustan Zinc have been executed in tranches rather than as a single large transaction.

Another divestment on the radar: LIC

Separately, the government is also planning an offering of a 2% stake in Life Insurance Corporation of India (LIC), people familiar with the matter have said. That LIC offering could raise as much as ₹10,000 crore ($1 billion). The report places the potential Hindustan Zinc sale alongside other large-ticket stake monetisation plans being considered.

Vedanta’s parallel move: OFS to sell up to 1.59%

Alongside the government’s divestment discussions, Hindustan Zinc shares have also been in focus due to a separate stake sale by promoter Vedanta Ltd. Vedanta has launched an offer for sale (OFS) to offload up to 1.59% of Hindustan Zinc.

As per corporate filings referenced in the article text, Vedanta’s base offer is up to about 3.35 crore shares, representing 0.79% of Hindustan Zinc’s equity, with an additional 3.35 crore shares as a Greenshoe option. This takes the total to 6.7 crore shares, or 1.59%.

Offer terms, floor price, and investor schedule

Vedanta set a floor price of ₹685 per share for the OFS. The floor price was described as a 5.8% discount to Hindustan Zinc’s Tuesday closing price of ₹727 on the BSE. Another reference in the text cites a closing price of ₹726.50 per share, with the floor price implying around a 6% discount.

The OFS was scheduled to open first for non-retail investors on Wednesday, January 28, 2026, with the retail window opening on Thursday, January 29. The sale is being conducted through the stock exchange mechanism, with participation on BSE and NSE mentioned in the filing summary.

Why Vedanta is selling and what happens to its holding

Vedanta has sold parts of its Hindustan Zinc stake twice in the past two years, according to the provided article text. This time, the stated purpose is to strengthen and deleverage its balance sheet and to optimise its capital structure.

As of December 31, 2025, Vedanta owned nearly 62% in Hindustan Zinc, as per the shareholding disclosure referenced. After successful completion of the OFS, including the Greenshoe option, Vedanta is expected to hold a little over 60%.

Market context: free float, block deals, and capex references

The OFS was also described as a move designed to boost Hindustan Zinc’s free float in the market. Separately, the text notes Hindustan Zinc was “under pressure” after a large block deal in which promoter Vedanta sold stake worth over ₹3,000 crore, with commentary suggesting about a “percent and a half” was sold.

The same commentary references a total capex of around ₹12,000 crore and that funding would come via internal accruals and debt, and adds that Vedanta Resources would get around ₹1,500 crore. These points were presented as part of market discussion around the transaction, without additional detail in the provided text.

Key numbers at a glance

What to watch next

For the government’s Hindustan Zinc divestment, the main near-term variable is the final decision on size and timing, since sources said details could still change. Investors will also track whether the sale is launched this month or in July, as indicated, and any finalisation of the offering structure.

On the Vedanta side, attention is on OFS participation across the non-retail and retail windows, the extent to which the Greenshoe is exercised, and the post-sale promoter holding level.

Conclusion

Two separate stake-sale tracks are shaping near-term attention on Hindustan Zinc: a possible government sale of up to 2% that could raise up to ₹5,000 crore, and Vedanta’s OFS of up to 1.59% at a ₹685 floor price. The next concrete milestone is whether DIPAM formally launches the government process within the suggested window and how the promoter OFS concludes after the scheduled investor sessions.