By: Farru Tech Business Desk
Date: June 18, 2025
Location: Udaipur / Mumbai
In a bold step towards future-proofing its leadership in the non-ferrous metals industry, Hindustan Zinc Ltd (HZL) — a Vedanta Group company — has unveiled plans to invest ₹12,000 crore to double its capacity across zinc, lead, and silver over the next three years. This expansion comes at a time when India’s industrial economy is poised for rapid infrastructure growth, and global demand for zinc and allied metals is tightening.
The company made the announcement following a board meeting on Tuesday, filing detailed plans with the Bombay Stock Exchange. The investment, to be funded through a blend of internal accruals and debt, will be executed over 36 months with the first phase of expansion centered in Debari, Rajasthan — a hub of HZL’s operational footprint.
The Expansion Blueprint: Capacity and Capability Surge
Hindustan Zinc currently holds an integrated metal production capacity of 1,129 kilo tonnes per annum (ktpa) — broken down as 919 ktpa of zinc and 210 ktpa of lead — operating at an impressive 93% capacity utilization as of FY25. With this fresh capital injection, the company aims to raise its refined metal capacity by 250 ktpa, taking the total smelting capacity to 1,379 ktpa.
Key vertical expansions include:
- Zinc smelting capacity to increase to 1,169 ktpa
- Lead production scale-up in parallel with zinc
- Silver refining capacity to rise from 800 to 830 tonnes per annum
- Ore mining capacity to increase from 19.3 to 23.9 million tonnes per annum (mtpa)
The Debari facility — one of the company’s oldest and most strategically located smelters — will serve as the epicenter for this growth, leveraging existing infrastructure while integrating advanced technology to meet both domestic and export requirements.
HZL: A Backbone of India’s Non-Ferrous Industry
Hindustan Zinc Ltd, headquartered in Udaipur, Rajasthan, is India’s largest zinc-lead miner and the world’s second-largest integrated zinc producer. Originally established as a public sector enterprise, the company was disinvested and taken over by the Vedanta Group in 2002. Since then, HZL has grown into a vertically integrated giant spanning mining, smelting, refining, and power generation.
HZL operates five major underground mines in Rajasthan — Rampura Agucha, Sindesar Khurd, Zawar, Rajpura Dariba, and Kayad — and maintains a robust smelting and refining network across north-western India. Its products include refined zinc, lead, and silver, along with by-products like sulphuric acid and cadmium.
With a 77% share in India’s primary zinc market, HZL plays a critical role in India’s infrastructure, construction, automotive, and steel galvanizing sectors. On the international front, HZL exports to markets across Asia, Europe, and the Middle East, maintaining long-term commercial relationships and contributing to global zinc supply chains.
The company also operates captive power plants and is expanding into renewable energy sourcing, with investments in solar and wind capacity as part of its green transition agenda.
Strategic Alignment with India’s Economic Growth
Speaking on the vision behind the investment, Arun Misra, CEO of Hindustan Zinc, emphasized the need for integrated scale and self-sufficiency:
“This 2x growth initiative is aligned with India’s accelerating industrial and infrastructure development. As steel demand surges, galvanization using zinc will be critical. We aim to match this national growth tempo while creating long-term value for our stakeholders.”
India’s steel production is projected to rise from 205 million tonnes per annum (mtpa) in FY25 to 300 mtpa by FY30, creating a parallel spike in zinc demand. Galvanized steel — heavily dependent on zinc — is essential for highways, bridges, rail networks, electrical grids, and housing infrastructure.
HZL’s investment, therefore, is not merely an operational decision — it is an alignment with India’s macroeconomic blueprint and the government’s “Make in India” and self-reliance (Aatmanirbhar Bharat) initiatives.
Financials: Building for Scale and Profitability
The company reported a revenue of ₹34,083 crore in FY25, up 18% from the previous year. Following the completion of this expansion phase, HZL expects revenues to surge to ₹42,000 crore, propelled by higher production volumes and enhanced efficiency.
- FY25 EBITDA: ₹17,465 crore
- Projected Post-Expansion EBITDA: ₹22,000 crore
These projections factor in improved economies of scale and pricing resilience in global zinc and silver markets. The company also expects operational synergy through digitization and AI-based mining optimization.
Stock Market Reaction and Parent Group Dynamics
Despite the long-term optimism, HZL’s stock closed at ₹486.40 on the BSE, down 5.19%, reflecting investor caution around near-term cash flow impact due to the large capex plan. Market watchers are also reacting to speculation that Vedanta Ltd, which holds a 63.42% stake in HZL, may look to dilute its holdings to improve its group-level balance sheet.
Analysts believe the market will stabilize once further clarity on stake dilution and debt structure emerges. Long-term sentiment remains positive, especially given the strong fundamentals and future market potential of zinc and allied metals.
With global zinc supply under pressure and industrial demand growing, Hindustan Zinc’s expansion comes at a critical inflection point for India’s resource economy. The company’s ability to execute this ₹12,000 crore project on time will determine not just its profitability but also India’s position in the global non-ferrous metal ecosystem.
As India gears up for its next industrial leap, Hindustan Zinc is betting big — not just on metal, but on momentum.
Disclaimer:
This article is based on publicly disclosed financial data, regulatory filings, and verified executive statements as of June 18, 2025. Business projections are subject to change depending on economic, regulatory, and operational developments. The views and analysis herein are intended for informational purposes and do not constitute investment advice.
Sources:
– BSE Filing by Hindustan Zinc Ltd (June 2025)
– Hindustan Zinc FY25 Annual Report
– Press Briefing from CEO Arun Misra
– Data from Ministry of Steel, Government of India
– Market Reports via Bloomberg, Reuters, and Business Standard
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