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Vedanta Shares Climb 2.6% As Stake Changes Hands In Large Trades

Shares of Vedanta jumped to the highest in a month on the back of large trades.

The logo of Vedanta Resources sits on a newly molded aluminum ingot. (Photographer: Oliver Bunic/Bloomberg)
The logo of Vedanta Resources sits on a newly molded aluminum ingot. (Photographer: Oliver Bunic/Bloomberg)

Shares of Vedanta Ltd. jumped to the highest in a month on the back of large trades.

As many as 95.6 million (9.56 crore) shares of the Anil Agarwal-led mining company changed hands, according to Bloomberg data. Details of the buyers and sellers weren't immediately known.

Shares of Vedanta rose nearly 10%, the biggest intraday gain in over four weeks, to Rs 361 apiece in intraday trade. The stock closed 6.3% higher with trading volume at 15.8 times of the 30-day average volume.

Vedanta Shares Climb 2.6% As Stake Changes Hands In Large Trades

This came after Vedanta promoters—Twin Star Holdings Ltd. and Vedanta Netherlands Investments BV—announced that they would buy around 17 crore shares, amounting to 4.57% stake in a block deal. The offer was priced at Rs 350 apiece, culminating in a transaction value of Rs 5,950 crore. JPMorgan India Pvt. is acting as the broker to promoters.

Promoters, according to exchange data, held 65.18% stake in the company, while public owned 34.50% as on Sept. 30.

Last week, Vedanta set up a board committee to evaluate value unlocking measures, review and simplify its corporate structure, evaluate spin-offs and strategic partnerships.

The company had hinted that its aluminium, iron and steel, and oil and gas businesses would be housed in standalone listed entities.

Moody's, in a report on Saturday, said the potential spinoff of key businesses of Vedanta into separate listing companies was unlikely to affect credit quality.

Moody's view on Vedanta:

  • Spinoff likely to result in three new listed entities with shareholding mirroring that of Vedanta.

  • After spinoff, each entity will reports its separate financials and the consolidated profile will continue to draw the benefits of a diversified business model.

  • The company's consolidated credit metrics remain unchanged because its economic interest in all its businesses will remain the same.

  • Expects Vedanta's standalone debt to be transferred to the three listed companies equitably.

  • Estimates the new listed companies to distribute 30% of their annual profit through dividends, aligned with the policies of Vedanta and Hindustan Zinc Ltd.

Of the 20 analysts tracking Vedanta, 14 maintain a 'buy', four suggest a 'hold' and two recommend a 'sell', according to Bloomberg data. Nine analysts have raised their price targets over the past month. The 12-month consensus price target implies an upside of 21.2%.