Hindustan Zinc shares have crossed the ₹800 mark, but there is a problem

With Wednesday’s surge, the stock has extended its gains in the last one month to over 90%. Sacchitanand Uttekar of Tradebulls, while speaking to CNBC-TV18 on Tuesday had projected the stock to touch levels of ₹815 to ₹820 on the upside.

Within the first five months of the year, the stock has risen 150%.

However, a major issue surrounding Hindustan Zinc is the lack of free float available in the market.
Promoter Vedanta owns a 64.92% stake in the company as of the March quarter shareholding. Even within the 35% public shareholding, the government owns 29.54%, while LIC has a 2.78% stake. With 97.24% of the shareholding with Vedanta, the Government and LIC, the retail shareholders are left with barely any float.

As of the March quarter shareholding, Hindustan Zinc has 4.1 lakh retail shareholders with nominal share capital of up to ₹2 lakh, who own a 1.7% stake in the company, while the rest is divided between Foreign Portfolio Investors, Mutual Funds and others.

At the day’s high, the government’s shareholding in Hindustan Zinc has crossed the mark of ₹1 lakh crore.

Hindustan Zinc is India’s only listed Silver play. The precious metal contributed to 19% of its overall topline in financial year 2024.

Most of the street continues to remain bearish on Hindustan Zinc, despite this gravity-defying surge. Eight out of the 12 analysts who have coverage on the stock have a “sell” recommendation. From Wednesday’s high, the lowest price target on Hindustan Zinc (₹260 by Investec), implies a potential downside of nearly 68%.

Shares of Hindustan Zinc are trading 7% higher at ₹790.