Hindustan Zinc’s demerger proposal is rejected by the government: Report

Hindustan Zinc’s plan to divide the business into many divisions has been rejected by the government, according to Reuters, which cited a source.

Despite holding a 29.54% minority ownership in Hindustan Zinc, the government is not the company’s primary stakeholder, according to the source, and was not consulted before the decision was made to break the company into separate organizations for the recycling, lead, zinc, and silver sectors.

Hindustan Zinc has previously said that the company’s “potential value” will be unlocked by the demerger.

It is unlikely to generate value for shareholders, the government source said Reuters.

The Ministry of Mines, which is in charge of Hindustan Zinc, has been informed of the company’s opposition, the source said.

The government had already rejected Hindustan Zinc’s second attempt to purchase two Vedanta organizations earlier in March. The idea was abandoned by the corporation when the government spoke with the market regulator.

It should be mentioned that Vedanta has a stake in Hindustan Zinc that exceeds 64%.

On the Bombay Stock Exchange, shares of Vedanta were up 0.16 percent to Rs 273.75, while shares of Hindustan Zinc were up 0.87 percent at Rs 296.55.