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Hindustan Zinc's stock is crashing due to a large block deal by promoter Vedanta, which sold a 1.6–1.71% stake at a discount, causing a 6–7% intraday drop. Concerns over further promoter selling and technical weaknesses have extended the stock's decline, wiping off ~15% of its value in a week. Despite this, the company's long-term fundamentals remain strong, with significant capital expansion plans and favorable production costs, suggesting potential buying opportunities for investors willing to endure short-term volatility.

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10 views2 pages

Share 1

Hindustan Zinc's stock is crashing due to a large block deal by promoter Vedanta, which sold a 1.6–1.71% stake at a discount, causing a 6–7% intraday drop. Concerns over further promoter selling and technical weaknesses have extended the stock's decline, wiping off ~15% of its value in a week. Despite this, the company's long-term fundamentals remain strong, with significant capital expansion plans and favorable production costs, suggesting potential buying opportunities for investors willing to endure short-term volatility.

Uploaded by

Manoj
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Why the stock is crashing

1. Large block deal by promoter Vedanta

• On June 18, 2025, Vedanta offloaded around 1.6–1.71% stake (~66–72 million shares) in
Hindustan Zinc via a block deal valued between ₹3,000–₹3,323 crore
tradingview.com+15outlookmoney.com+15businesstoday.in+15.

• The shares were sold at a discount: floor price ranged between ₹452.5–₹460 compared to
the previous close (~₹486) outlookmoney.com+4businesstoday.in+4niftytrader.in+4.

• This triggered a sharp drop of 6–7% intraday, taking the stock down from ~₹486 to around
₹452–₹456 .

2. Promoter overhang and market sentiment

• The block sale created a supply overhang concern: markets fear Vedanta may continue
selling, weighing on near-term demand
tradingview.com+14m.economictimes.com+14niftytrader.in+14.

• Notably, this drop extended a six-session losing streak, wiping off ~15% of the stock value
within a week niftytrader.in+3m.economictimes.com+3tradingview.com+3.

3. Technical weakness

• Analysts flagged a break below key support zones—₹502 and the 200-day moving average—
raising the possibility of further decline toward ₹450 stocktwits.com.

What’s next?

Medium/long-term fundamentals remain strong:

• Hindustan Zinc recently announced a massive ₹12,000 crore capex to expand zinc smelting
capacity by 250 ktpa in Rajasthan, part of a strategy to double capacity by FY28
m.economictimes.com+8outlookmoney.com+8m.economictimes.com+8.

• Broking houses like JM Financial maintain a Buy rating with targets of ₹550, citing low
production costs and captive power advantages
moneycontrol.com+4businesstoday.in+4m.economictimes.com+4.

• Others like Motilal Oswal call it Neutral, pricing in the positives already, with targets around
₹480 m.economictimes.com.

Watch for:

• Any further promoter selling (which might pressure prices short term).

• Zinc commodity trends and macro factors (which affect margins).

• Whether the ₹12k cr capex execution progresses smoothly.

What should you do?


Time Horizon Strategy

Short-term (days– Be cautious: the stock is facing technical headwinds and potential additional
weeks) supply from promoter sales.

If you're bullish on the expansion and zinc cycle, current levels (₹450–₹460)
Medium to long-
might offer a good entry point, though consider spreading out your purchases
term (6–24 months)
(“phased buying”).

Bottom line

The steep drop to ₹450–₹460 isn’t because of any operational or industry crisis—just promoter
selling leading to technical momentum weakness. The underlying growth story and cost advantage
remain intact, making it a potentially compelling opportunity—if you can ride out the volatility.

Would you like to track technical signals, set alerts around support/resistance levels, or dive deeper
into broker models or capex timelines?

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