Investment firm Jefferies has initiated a buy recommendation on Hindustan Zinc, setting a target price of ₹660 per share. This recommendation represents a significant vote of confidence from one of the prominent global investment banks in the mining sector.

Brokerage Recommendation Details

The key parameters of Jefferies' recommendation are outlined below:

Investment Outlook

Jefferies' decision to initiate coverage with a buy rating suggests the brokerage sees potential upside in Hindustan Zinc's stock. The target price of ₹660 indicates the firm's assessment of the company's value based on its operational performance, market position, and sector dynamics.

Market Implications

Brokerage recommendations from established firms like Jefferies may influence investor sentiment and trading activity. The buy call reflects professional analysis of the company's financial metrics, operational efficiency, and growth trajectory within the mining sector.

This recommendation comes at a time when mining companies are being closely watched by investors for their operational performance and market positioning. Jefferies' stance on Hindustan Zinc may attract investor attention to the stock.

The buy recommendation from Jefferies signals a positive outlook for Hindustan Zinc's prospects, potentially influencing investor perceptions and market dynamics in the mining sector.

Hindustan Construction Company has executed a significant reduction in its corporate guarantee obligations, marking a major milestone in liability reduction while retaining equity upside. The infrastructure company has successfully reduced its corporate guarantee for Prolific Resolution Private Limited (PRPL) by ₹3,364.00 crore.

Debt Restructuring Background

As part of HCC's debt restructuring plan with lenders in September 2022, the company had transferred ₹2,854.00 crore of debt and ₹6,508.00 crore of awards and claims to PRPL, while retaining a 49% equity stake in the entity. HCC had initially provided a corporate guarantee for 100% of PRPL's debt to its lenders.

Guarantee Reduction Details

Following formal approvals from PRPL lenders, its Board, and relevant stakeholders, HCC's guarantee obligation has been reduced from 100% of the outstanding amount to ₹571.00 crore. This represents 20% of the principal amount transferred, with exchange approval related formalities currently in progress.

With accrued interest, the total amount of PRPL debt along with awards and claims is currently ₹3,935.00 crore and ₹6,325.00 crore, respectively. The revised guarantee framework has been executed in coordination with lending institutions and is in compliance with applicable regulatory, legal, and governance requirements.

Strategic Impact and Future Outlook

This reduction is part of HCC's ongoing commitment to de-leverage its balance sheet, strengthen its investment grade rating, and access capital markets for stronger future growth as it scales its operations. The material event has paved the way for HCC to access larger credit facilities and raise equity capital, including the recently announced Rights Issue which is supported by HCC's Promoter Group.

The substantial decrease in corporate guarantee obligations represents a significant improvement in the company's contingent liabilities and overall financial flexibility, creating long-term value for shareholders while maintaining the 49% equity upside in PRPL.