The Government of India is considering divesting up to a 2% stake in Hindustan Zinc Ltd through an offer for sale (OFS), a transaction that could generate as much as ₹50 billion ($525 million) for the exchequer, according to people familiar with the matter.

The proposed stake sale is being evaluated by the Department of Investment and Public Asset Management (DIPAM), which functions under the Ministry of Finance. Sources indicated that the government could initiate the process either later this month or in July, depending on market conditions and regulatory approvals.

The Centre remains a significant minority shareholder in Hindustan Zinc, holding approximately 27.9% of the company, while Vedanta Ltd continues to be the majority shareholder. The potential sale forms part of the government's ongoing efforts to monetize public assets and raise resources through strategic divestments.

At the proposed size, the transaction would rank among the larger government stake sales of the year. The move follows previous divestment exercises in Hindustan Zinc, including a 2.5% OFS conducted in 2024 and multiple stake sales by promoter Vedanta over the past two years.

Market participants will closely watch the timing and pricing of the proposed OFS, particularly given Hindustan Zinc's strong position in the zinc, lead, and silver markets and its significant weight within India's metals sector. The sale could also improve the company's public shareholding and trading liquidity.

No final decision has been announced, and the size, timing, and structure of the transaction remain subject to market conditions and government approval.