Shares of mining giants Hindustan Zinc Ltd and Vedanta Ltd experienced significant declines in Friday's trading session. The downturn was triggered by a combination of market reports suggesting a potential government stake sale in Hindustan Zinc and confirmation of Enforcement Directorate (ED) searches at Vedanta's premises.
Government Considers Hindustan Zinc Stake Sale
According to a Bloomberg report, which cited unnamed sources, the Indian government is reportedly considering divesting its stake in Hindustan Zinc. This news sent Hindustan Zinc shares down by 6.16 per cent, settling at Rs 566.55. Vedanta, the promoter of Hindustan Zinc, currently holds a 60.71 per cent stake in the company. Vedanta's shares also saw a decline of 3.94 per cent, trading at Rs 314.55 following these reports.
Vedanta Confirms ED Searches Over FEMA Allegations
Separately, Anil Agarwal-led Vedanta confirmed that the Enforcement Directorate had conducted searches at its offices. The searches, which took place between June 1 and June 3, were in connection with alleged violations of provisions under the Foreign Exchange Management Act (FEMA). The company's offices in Delhi, Mumbai, and Udaipur were covered during the operation.
In an exchange filing, Vedanta clarified that its officers fully cooperated, providing all necessary information, documents, and clarifications requested by the ED. The company stated, "There is no impact on financial, operation or other activities of the company," and confirmed that no penalty or restriction has been imposed by the central agency as a result of the searches.
Market Outlook and Demerger Progress
Despite the recent turbulence, Systematix Institutional Equities has maintained 'Buy' ratings for both Hindustan Zinc and Vedanta. The brokerage noted a broad-based improvement in Q4 FY26 for Indian metals and mining companies, attributing it to stronger realisations, volume growth, and enhanced operating efficiencies.
Meanwhile, Vedanta's stock has also been under market scrutiny due to its ongoing demerger exercise. The company plans to split into four separate entities, with the listings of these new entities still pending and eagerly awaited by investors.