Hindustan Zinc is advancing its plan to demerge into distinct units, focusing on creating separate entities for silver and for zinc and lead. The proposal is under review by the mines ministry.
Under the revised plan, Hindustan Zinc aims to establish two new companies – one dedicated to silver and the other combining zinc and lead operations. The recycling unit will operate as a subsidiary.
The restructuring is expected to increase the company’s market capitalization by an estimated $3-4 billion, according to Arun Misra, CEO, Hindustan Zinc. Misra noted that the separation of the silver unit could significantly enhance the company’s market value.
Previously, Hindustan Zinc had considered a plan to split into three separate entities – one each for zinc and lead, silver, and recycling. However, the new proposal simplifies this into two main units. The company plans to boost silver production to 800 tons this year, with future targets of 1,000 tons and eventually 2,000 tons.
Misra mentioned that the high current prices of silver make the creation of a dedicated silver company a strategic move.
The silver division reported a revenue of ₹1,427 crore for the quarter ending June 30, marking a 10% year-on-year increase. As reported by thehindubusinessline.com, Misra believes that making recycling a separate subsidiary will add substantial value, as it currently lacks a distinct revenue stream.
