Vedanta has had a tough year at the bourses, but in the past few weeks, the mining giant has generated quite a lot of buzz. As the company looks to demerge its businesses to handle its debt, investors have been giving the conglomerate a keen look.
The Investment: Imagine this: On October 4, 2013, your dad decided to invest ₹10,000 in Vedanta. He buys 145.55 shares at ₹68.7 each. Fast forward to the same date in 2023, and those shares are now trading at around ₹230.75. That initial investment has now grown to ₹33,586.5, a whopping increase of 235.87%!
The Background: The announcement of the demerger seems to have induced some hope in investors regarding the debt-laden conglomerate. Prior to the correction today, the stock had jumped around 10% in the past two sessions since the announcements.
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The new proposal outlines the establishment of five new publicly traded companies: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, and Vedanta Base Metals, in addition to the existing entity, Vedanta Ltd. Anil Agarwal has also announced the company’s intention to complete a steel asset sale within this fiscal year.
Media reports also suggest that the Anil Agarwal-led company is on the brink of raising $3 billion (around ₹24,000 crore) from big players like JP Morgan and Standard Chartered. The funds are believed to assist the company in preventing a potential default on its forthcoming payments.
Price Action: Vedanta’s share price was down 3.38% to trade at ₹222.95 in the mid-market hours of trading on Wednesday.
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Note: Data from Yahoo Finance. Adjusted for splits and dividend and/or capital gain distributions.
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