The central government, which holds a 27.94% stake in Hindustan Zinc Ltd (HZL), is reportedly planning to slow down the pace of its disinvestment, as high dividend inflows make the company’s shares financially attractive.
The government is in no hurry to sell its stake in HZL, as it continues to receive strong dividends, a senior official told Moneycontrol. Selling the entire stake now could fetch around ₹40,000 crore but would mean forgoing steady future dividends. Instead of an immediate Offer for Sale (OFS), the Centre may consider a staggered sale or a Qualified Institutional Placement (QIP) later.
This signals a shift from earlier disinvestment strategies focused on quick monetisation to a greater emphasis on long-term fiscal gains. The government is reassessing both the timing and the mode of sale, the official said.
Hindustan Zinc Ltd closed Friday trade at ₹514.40, down ₹2.55 or 0.49%.
HZL, one of India’s top dividend-paying companies, declared its first interim dividend for FY26 at ₹10 per share on June 11. The Centre benefits significantly from these payouts. With a dividend yield of 3.99%, HZL has maintained strong returns, having paid ₹10 in May and ₹6 in December 2023.
In Q4 FY25, HZL posted its highest-ever quarterly net profit of ₹3,003 crore, up 47% year-on-year, and revenue of ₹9,087 crore, a 20% increase. EBITDA rose 32% to ₹4,816 crore with a 53% margin, while the net profit margin improved to 33%. Revenue from zinc, lead, and silver grew over 21% to ₹8,806 crore.
The company also achieved record mined and refined metal output in FY25, cementing its position as the world’s largest integrated zinc producer.
The Indian government first sold a 26% stake in HZL to Sterlite, part of the Anil Agarwal-led Vedanta Group, in 2002. This was followed by an 18.92% acquisition by the company in 2003, bringing total divestment to around 45%. The government retained about 29.54% after that.
In November 2024, the Narendra Modi-led government sold an additional 1.6% via an OFS, raising ₹3,449 crore and reducing its stake to 27.94%.
