Hindustan Zinc , a subsidiary of Vedanta and one of the world's top five silver producers, saw its shares climb up to 5% on the stock market, breaking a three-day losing streak. The surge positioned the company as one of the top gainers on the Nifty 500 index, coinciding with silver prices reaching unprecedented levels globally.

Silver Price Rally

The rally in Hindustan Zinc shares comes against the backdrop of a remarkable performance in silver prices:

• Silver has gained over 35% in the past year
• In the last month alone, silver prices have surged by more than 5%
• Global silver prices are currently trading around $40.00 per ounce
• Domestic MCX silver prices have also hit record highs

Adding to the bullish sentiment, the US Geological Survey has proposed including silver in the Critical Minerals list, potentially boosting its strategic importance.

Hindustan Zinc's Silver Production

As India's only listed silver play, Hindustan Zinc's performance is closely tied to silver prices. However, the company faces some challenges:

• Silver production declined recently
• Management has guided for a recovery to 700 tonnes in the future
• The company expects silver prices to reach $41.00-$42.00 per ounce in the coming years

Stock Performance and Ownership

The positive sentiment around silver prices has had a notable impact on Hindustan Zinc's stock:

• Shares closed 3.90% higher at ₹435.80
• The stock broke above its 50-day moving average of ₹433.00
• Trading volumes surged to 40 lakh shares, compared to the 20-day average of 6 lakh shares

Ownership structure of Hindustan Zinc:

• Vedanta holds a 61.84% stake
• The government maintains over 25% ownership

Future Outlook

Hindustan Zinc's management is considering value unlocking plans for the future, which could potentially drive further interest in the stock. As global demand for silver continues to rise, particularly in industries such as renewable energy and electronics, Hindustan Zinc's position as a major producer could prove advantageous.

Investors will likely keep a close eye on the company's ability to meet its production recovery targets and capitalize on the favorable silver price environment in the coming years.

Hindustan Foods Limited (HFL), a leading contract manufacturer in the FMCG sector, has made a strategic move into the waste management and recycling industry. The company has acquired a 25.07% stake in Asar Green Kabadi Private Limited for ₹5 crore, marking its entry into a new business segment.

Acquisition Details

According to a regulatory filing, Hindustan Foods has executed a Share Subscription Agreement (SSA) to acquire 24,643 Series B Compulsorily Convertible Preference Shares (CCPS) of Asar Green Kabadi. This acquisition represents 25.07% of the total share capital on a fully diluted basis.

Financial Terms

The total consideration for the stake is ₹5 crore, structured as follows:

• ₹4.00 crore paid as cash consideration
• ₹1.00 crore adjusted against an outstanding loan provided by Hindustan Foods to Asar Green Kabadi

About Asar Green Kabadi

Asar Green Kabadi Private Limited, incorporated on November 24, 2014, specializes in waste management, scrap collection, recycling solutions, and circular economy services. The company has shown consistent growth in recent years:

Strategic Implications

This acquisition aligns with Hindustan Foods' strategy to diversify its business portfolio. By entering the waste management and recycling sector, HFL is positioning itself to capitalize on the growing emphasis on sustainable practices and circular economy initiatives.

Regulatory Compliance

The transaction is subject to the completion of conditions precedent as outlined in the Share Subscription Agreement. Hindustan Foods expects to complete the acquisition by Q2 FY 2025-26, subject to fulfillment of the terms and conditions set out in the SSA.

Market Impact

As a contract manufacturer for various FMCG products, including foods, personal care, and home care items, Hindustan Foods' entry into waste management could potentially create synergies with its existing operations. This move may enhance the company's sustainability profile and open up new revenue streams in the environmental services sector.

The waste management industry in India is experiencing rapid growth, driven by increasing urbanization and government initiatives promoting cleaner environments. Hindustan Foods' investment in Asar Green Kabadi positions the company to benefit from this expanding market.

Investors and industry observers will be watching closely to see how Hindustan Foods leverages this new venture to complement its core business and drive future growth in the evolving landscape of sustainable manufacturing and waste management.