Shares of Hindustan Zinc Ltd., owned by Vedanta Ltd. under the leadership of Anil Agarwal

Shares of Hindustan Zinc Ltd., owned by Vedanta Ltd. under the leadership of Anil Agarwal, surged following the announcement of a Memorandum of Understanding (MoU) with AEsir Technologies. This partnership aims to innovate in the battery storage space, with Hindustan Zinc becoming the preferred supplier of zinc for the US-based company’s next-generation battery technologies.

Pioneering Zinc Battery Technology

AEsir Technologies, renowned for its advancements in zinc battery technologies, will use zinc as a critical raw material for its next-generation batteries. This collaboration aligns with Hindustan Zinc’s strategy to explore emerging applications of zinc in the clean energy sector. Zinc batteries are increasingly preferred for their corrosion resistance, cost-effectiveness, recyclability, stability, and environmental friendliness.

Leadership Statements

Arun Misra, CEO of Hindustan Zinc, emphasized the environmental benefits of the collaboration: “By providing high-quality zinc for cutting-edge energy storage, we are opening sophisticated new avenues for environmentally friendly solutions for a greener tomorrow.”

Randy Moore, Co-founder and CEO of AEsir Technologies, highlighted the innovation potential: “We are achieving great innovation in this space and this collaboration with Hindustan Zinc provides us with critical raw material for the development of next-gen Nickel Zinc batteries.”

Market Response and Company Performance

Hindustan Zinc is India’s largest and the world’s second-largest zinc producer, with Vedanta holding a 64.92% stake. The stock of Hindustan Zinc saw a 3.2% increase, trading at ₹668.40, and has more than doubled in 2024, rising by 110%. This marks the first instance of such growth in a calendar year since 2009.

In an exclusive interview with CNBC-TV18, Vedanta Group Chairman Anil Agarwal expressed optimism about the growth potential of Hindustan Zinc, emphasizing the tremendous scope for scaling up operations.

Vedanta Group’s Financial Performance

Vedanta Group, comprising Vedanta Ltd and Hindustan Zinc Ltd, has generated significant wealth for investors, with a combined market valuation surge of ₹2.2 lakh crore between March 28 and June 20, 2024. This growth outpaced leading businesses like Reliance Industries, Mahindra Group, and the Tata Group.

Vedanta Ltd recently announced a ₹1,000 crore fundraising through the private placement of non-convertible debentures (NCDs). These secured, rated, listed, and redeemable debentures will be traded on the BSE.

Strategic Roadmap and Financial Highlights

Vedanta achieved its second-highest-ever revenue of ₹1,41,793 crore and an EBITDA of ₹36,455 crore in FY24, maintaining a 30% EBITDA margin despite a moderate commodity cycle. The group has a strategic roadmap to achieve an EBITDA of $10 billion in the near term, backed by more than 50 high-impact growth projects across zinc, aluminum, oil & gas, and power businesses.

Foreign institutional investors increased their holdings in Vedanta to 8.77% by the end of the March quarter, up from 7.74% the previous quarter. Analysts predict that strengthening commodity prices and cost optimization initiatives will support Vedanta’s profitability in FY25.

Stock Performance

On May 22, Vedanta and Hindustan Zinc stocks hit all-time highs of ₹506.85 and ₹807, respectively. On June 20, Vedanta shares jumped 4.86% to ₹470.25, while Hindustan Zinc climbed 2.29% to ₹647.65 on the BSE.