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

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 were not immediately known.

The stock jumped 8% to Rs 354.5 apiece. Its trading volume was 33.4 times the 30-day average for this time of the day.

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 constituted 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%.