Vedanta is among the top three losers on the BSE, going down 9.5% to hit an intraday low at Rs.306.45, which is not too far its 10% LC of the day at Rs.304.60.
The market is not too happy with the company’s decision to appoint a committee of directors to evaluate and recommend a range of options and alternatives, including demergers, spin-offs or strategic partnerships of its aluminium, iron & steel, and oil & gas businesses.
What this means is that the company is separating its aluminium, steel, and oil and gas businesses, and publicly listing them, as it seeks to unlock value and simplify the company’s structure.
The London based parent will continue to be the holding company while the three businesses will operate independently.
In our Big Gems section, our Editor, Mr.SP Tulsian said, “Big is seen cooking in Vedanta now. Aluminium, Iron & Steel, and Oil & Gas businesses may get spun off from Vedanta and would get listed separately. All 3 verticals grown big, with huge growth opportunities seen going forward. Vedanta may see Zinc & Silver Business retained with it. Power vertical may also get hived off to a new entity. NALCO may get acquired in new hived off Aluminium company and BPCL may get acquired in Oil & Gas entity, while bith are seen certain to get acquired. Residual stake of 29.5% in Hind Zinc of Govt, may get acquired by Vedanta in part or in full. Any more acquisitions like SCI may be made in Vedanta.”