The Anil Agarwal-led conglomerate Vedanta Ltd. is set to complete one of India's largest metals and mining industry demergers, with its four new entities making their stock market debut on Monday, June 15. The record date for the demerger was May 1, allowing eligible shareholders to receive one share each of Vedanta Aluminium Metal Ltd (VAML), Vedanta Power Ltd, Vedanta Oil & Gas Ltd, and Vedanta Iron & Steel Ltd for every Vedanta share they held.
While Vedanta's original shares have continued to trade, the individual value of these newly separated businesses has remained undiscovered by the market until their independent listings. The company's stock price had already adjusted following the demerger announcement.
New Entities Enter Trade-to-Trade Segment
Upon their debut, Vedanta Oil & Gas, Vedanta Power, Vedanta Aluminium Metal, and Vedanta Iron & Steel will initially be placed in the Trade-to-Trade (T2T) segment. This segment mandates compulsory delivery for all trades, aiming to curb speculative activity during initial listing phases.
Analyst Insights on Investment Potential
As these Vedanta demerger stocks become available for trading, analysts are weighing in on which segments might attract significant investor interest. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, highlighted Vedanta Aluminium Metal as a potential focus. Bathini pointed to the company's ongoing capacity expansion in aluminium and favorable trends in LME (London Metal Exchange) aluminium prices as key supporting factors for VAML.
Nuvama Institutional Equities noted that Vedanta's overall resources portfolio benefits from its scale, diversification, and a strong balance sheet, particularly bolstered by its low-cost, cash-generating zinc-lead-silver business. The brokerage emphasized the company's globally competitive zinc production costs due to captive mines. Future growth, Nuvama suggests, is expected to come from increased volumes across core businesses like aluminium and zinc, alongside improved cost efficiencies in aluminium operations.
Emkay Global Financial Services also expressed optimism, seeing a strong re-rating case for both Vedanta Aluminium and Vedanta Power. The independent listings are expected to provide investors with distinct investment avenues, allowing them to allocate capital directly to the aluminium, power, oil & gas, and iron & steel sectors.