Key facts
- Four demerged companies from Vedanta—Vedanta Aluminium Metal, Vedanta Power, Vedanta Oil & Gas, and Vedanta Iron & Steel—began trading on Indian exchanges on June 15.
- Shareholders received one share in each of the four new entities for every share held in Vedanta.
- The restructuring aims to simplify the corporate structure and enable price discovery.
- Analysts have provided valuations for the demerged stocks, with Vedanta Aluminium Metal seen as potentially the most attractive.
- Vedanta Aluminium has a target capacity of 3 million tonnes per annum by FY28 and operates the world's largest single-location aluminium smelter.
Four companies carved out of billionaire Anil Agarwal's Vedanta conglomerate began trading separately on Indian stock exchanges on June 15, following a major corporate restructuring. The demerged entities are Vedanta Aluminium Metal, Vedanta Power, Vedanta Oil & Gas, and Vedanta Iron & Steel. Eligible shareholders received one share of each new company for every share they held in Vedanta.
Analysts are providing insights into which of the newly listed stocks might offer better returns. Vedanta Aluminium Metal is highlighted as a potentially attractive investment due to robust capacity expansion plans and strong global aluminium prices. ICICI Direct noted its strong contribution to group revenues and margins, favorable industry dynamics, and ongoing capacity expansions.
ICRA recently upgraded Vedanta Aluminium Limited's long-term rating to Stable, expecting its financial profile to strengthen further due to increased aluminium prices. The company has an installed capacity of around 2.4 million tonnes per annum and aims for 3 million tonnes per annum by FY28, with further greenfield expansion under evaluation. It operates the world's largest single-location aluminium smelter and exports to nearly 70 countries.
Valuations for Vedanta Aluminium Metal range from Rs 400+ to Rs 489 per share, according to analysts. For Vedanta Power, estimates range from Rs 35 to Rs 60 per share. Vedanta Oil & Gas is valued at approximately Rs 42 per share, and Vedanta Iron & Steel at around Rs 19 per share.
Nuvama reported that Vedanta and Vedanta Aluminium will likely remain large-cap stocks, while Vedanta Power, Vedanta Oil & Gas, and Vedanta Steel & Iron ore will list as small-cap stocks, potentially limiting mutual fund participation in the latter.