Hindustan Zinc Shares Jump 5% On Govt Stake Sale Clarity, Jefferies Bullish Call

Shares of Hindustan Zinc jumped more than 5% on Wednesday after the government clarified that it was not looking to sell its stake in the company at present, easing concerns over a potential offer for sale (OFS).

A bullish call from Jefferies, which raised its target price on Hindustan Zinc amid stronger zinc and silver prices, provided an additional boost to the stock.

The shares climbed as much as 5.1% to ₹623 in morning trade from the previous close of ₹592.60. Hindalco Industries, for which Jefferies also raised its target price but retained a 'Hold' rating, remained largely unchanged at around ₹1,050.50.

Govt Clarifies No Immediate OFS

The gains came a day after DIPAM Secretary Arunish Chawla told CNBC-TV18 that the government was "not looking at a stake sale in Hindustan Zinc at the moment".

The clarification is significant as the stock had come under pressure amid renewed speculation that the government could reduce its holding through an OFS.

Hindustan Zinc shares fell 1.89% on August 25 as expectations of a potential stake sale resurfaced. The speculation gained momentum after the government launched an OFS in Hindustan Copper at a discounted price, another company that had featured among its priority divestment candidates.

Earlier reports had suggested that the government could sell around 1.5% of Hindustan Zinc during the current financial year, with merchant bankers reportedly appointed for the proposed transaction.

The government currently owns 27.92% of Hindustan Zinc, while promoter Vedanta holds 60.71%. At recent market prices, a 1.5% stake sale could have fetched around ₹3,500-4,000 crore.

The latest comments from DIPAM have therefore reduced concerns about an imminent supply of shares through an OFS.

Jefferies Raises Hindustan Zinc Target

Adding to the positive sentiment, Jefferies retained its 'Buy' rating on Hindustan Zinc and raised its target price to ₹750 from its earlier level.

The new target implies an upside of around 27% from Tuesday's closing price.

The brokerage cited a favourable commodity-price environment, with spot zinc prices around 15% above their June-quarter average. Silver prices have also recovered 23% from their July lows.

Jefferies raised its FY27-FY29 earnings-per-share estimates for Hindustan Zinc by 10-11% to factor in stronger metal prices.

The combination of improving commodity prices and the absence of an immediate government stake sale has provided two positive triggers for the stock.

Brokerage Cautious On Hindalco

Jefferies was more cautious on Hindalco Industries, retaining its 'Hold' rating while raising its target price to ₹1,140 per share.

The brokerage noted that aluminium prices remain around 10% below their June-quarter average. It consequently cut its FY27-FY29 earnings estimates for Hindalco by 2-3%.

Hindalco shares were trading almost unchanged at ₹1,050.50 in morning deals.

The stock has gained 17.4% so far in 2026, while Hindustan Zinc was down 3.2% for the year as of Tuesday's close.