Vedanta slips 9%, nears 52-week low on huge block deals

Shares of Vedanta hit 11-month low of Rs 247.6 per share, as they slipped 9 per cent on the National Stock Exchange (NSE) in Thursday’s intra-day trade, amid huge volumes.

The stock traded close to its 52-week low of Rs 245.75, touched on August 4, 2022. Nearly 6 per cent of the company's total equity changed changed hands on the NSE and BSE. 

Till 09:52 am; around 371.7 million equity shares, which represented 5.6 per cent of Vedanta's total equity changed hands on the NSE and BSE. Of these, around 8.9 million shares of the company have changed hands via block deal on the BSE, data shows. However, names of the buyers and sellers are not ascertained immediately.

As per media reports, Twin Star Holdings, Anil Agarwal-owned promoter entity, is selling a 4.3 per cent stake in its India-listed subsidiary, Vedanta, to raise up to $500 million to repay debt of parent company Vedanta Resources.

In the past few months, Vedanta Resources, a London-based company also owned by Agarwal, has taken several steps to pay its debt and now analysts expect it to be successful at servicing its debt maturities of around $2 billion in the next 12 months, the Business Standard reported.

Meanwhile, on March 28, 2023, CRISIL Ratings revised its outlook to ‘Negative’ from ‘Stable’ due to possibility of higher-than-expected financial leverage and lower financial flexibility. This is due to increased cash outflow from Vedanta, in the form of dividends, towards large maturing debt obligations at its parent company viz. Vedanta Resources (VRL).

This, analysts said, is due to increased refinancing risk at VRL and moderating operating profitability.

"Vedanta’s profitability, leverage and financial flexibility could be materially impacted by slower-than-expected improvement in operational cost efficiencies, subdued volume growth in operational entities along with delayed/lower-than-expected refinancing by VRL," the rating agency added.