Shares of three recently demerged entities from Vedanta Ltd.—Vedanta Oil and Gas, Vedanta Iron And Steel, and Vedanta Power—reached fresh all-time highs on Thursday, extending a second day of strong gains. The surge follows the successful completion of Vedanta's demerger strategy, which has created five distinct listed companies within the group, including the parent entity.
Demerger Fuels Investor Confidence
Vedanta Oil and Gas Ltd experienced a significant leap, surging 13.65 percent to hit a lifetime high of Rs 44.05. Similarly, Vedanta Iron And Steel Ltd saw its shares jump 10 percent, reaching a record Rs 42.64. Vedanta Power Ltd also climbed, touching an all-time high of Rs 47.78 with a 7.98 percent increase. Vedanta Aluminium Metal Ltd and the parent company, Vedanta Ltd, also posted gains of up to 3.86 percent.
Anil Agarwal, Founder and Chairman of the Vedanta Group, highlighted the strategic rationale behind the demerger, stating it has created “focused businesses with significant growth potential.” He emphasized that “each of the five sectors is exciting and holds tremendous potential,” affirming the group's commitment to being a dividend-paying entity and generating value for all its companies.
Expert Caution Amid Rally
Despite the impressive rally in Vedanta demerger shares, market experts advise a cautious approach. Ravi Singh, Chief Research Officer at Master Capital Services, noted the positive investor response but warned against chasing the rally. “After such a sharp upmove, some short-term profit booking or consolidation cannot be ruled out,” Singh commented, suggesting that fresh investors should consider accumulating shares on dips for a better risk-reward profile.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, echoed this sentiment, preferring to wait for a couple of quarterly results to thoroughly assess the companies' performance before making significant investment decisions. He also recommended a 'buy-on-dips' strategy for those keen on exposure.
Future Growth and Investment Plans
Agarwal revealed ambitious plans for the group, intending to invest $20 billion over the next five years, primarily capitalizing on opportunities within India. He projected that “each of these companies has the potential to reach $100 billion in revenue,” underscoring the long-term vision for the newly independent entities.
Adding to the positive sentiment, Emkay Global has initiated coverage on Vedanta Aluminium with a 'Buy' rating, setting a target price of Rs 550, signaling confidence in the company's prospects.