Hindustan Zinc Shares Drop 1.5% After Announcing ₹500 Crore NCD Issuance

Shares of Hindustan Zinc, a subsidiary of Vedanta, fell 1.5% to ₹420.05 on the BSE on Tuesday following the company’s announcement of a ₹500 crore non-convertible debenture (NCD) issuance through a private placement. The move aims to raise capital while maintaining shareholder equity, but the market reacted with a slight dip in stock prices.

Board Approves NCD Issuance

The Board of Directors of Hindustan Zinc recently approved the proposal, reinforcing the company’s strategy of leveraging debt instruments without diluting ownership. The decision highlights Hindustan Zinc’s focus on financial stability and expanding its capital base efficiently.

In an official statement, the company said,

“We hereby inform that the duly authorized Committee of Directors at its meeting held today i.e., Monday, March 10, 2025, has considered and approved the issuance of unsecured, redeemable, rated, listed, non-convertible debentures (“NCDs” or “Debentures”) aggregating up to ₹500 Crore.”

Breakdown of NCD Issuance

The issuance, which will be conducted via private placement, is targeted at institutional investors and high-net-worth individuals (HNIs). The company will offer a total of 50,000 debentures, categorized into three parts:

• 10,000 STRPP 1 debentures

• 10,000 STRPP 2 debentures

• 30,000 STRPP 3 debentures

Each tranche will be separately transferable and redeemable, offering flexibility to investors.

Market Reaction and Outlook

Despite the stock’s 1.5% decline, analysts believe that Hindustan Zinc’s strong fundamentals and strategic capital raising efforts could support long-term growth. The issuance of NCDs is seen as a cost-effective financing strategy, enabling the company to expand its operations while managing its debt efficiently.

Investors will be closely watching how Hindustan Zinc utilizes the raised capital, and whether it leads to improved financial performance in the coming quarters.