Shares of Hindustan Zinc are trading up by 6 percent following the board's approval for a committee of directors to assess a corporate restructuring exercise that will enhance shareholder value.
Hindustan Zinc's parent firm Vedanta Ltd, also has plans to divide its commodities businesses into multiple companies to improve their valuations, according to Reuters.
After a thorough evaluation, it has been proposed to establish distinct legal entities for the Zinc and Lead, Silver, and Recycling sectors of the Company. In order to accomplish this, a group of directors has been authorized by the Board of Directors to assess and propose appropriate options and alternatives to the Board.
Shares of Hindustan Zinc also jumped and are trading 4 percent higher at Rs 309.50.
Vedanta's shares cut a seven day losing streak. Today's gains are the company's shares' best gains on a single day in the year 2023.
Anil Agarwal, the Chairman, recently announced that the company will consider listing some or all of its businesses separately. Vedanta Resources, the UK-based parent company of Vedanta Ltd, has been finding it difficult to raise funds due to rating downgrades and concerns about meeting its debt obligations.
Agarwal tried to reduce the group's debt by having Hindustan Zinc, a unit of Vedanta Ltd, buy some of the parent company's zinc assets in a deal worth $2.98 billion. However, the Indian government, which owns almost 30 percent of Hindustan Zinc, opposed the move.
Vedanta owns a total of 64.9 percent of shares in Hindustan Zinc, while the Indian government is the largest minority shareholder in the firm with a 29.54 percent stake.