Shares of Vedanta Ltd are in focus today, trading ex-demerger. After a special price discovery session, the stock fell by more than 62 per cent to Rs 289.5 on the National Stock Exchange (NSE). The stock had closed at Rs 773.6 on Wednesday.ย On the BSE, the stock’s ex-demerger price was set at Rs 290.50, representing a fall of Rs 482.75 or 62.43 per cent from the previous close of Rs 773.25. The stock witnessed selling pressure after touching an intraday high of Rs 291.05, falling to a 52-week low of Rs 271.50. Last seen, the stock was trading at Rs 278.95, and the market cap of the company stood at Rs 1,09,080.27.ย
What has led to a steep decline in the share price?
The steep decline in share price is due to the exclusion of value from four business verticals being spun off under the companyโs demerger plan. The stock is trading on an ex-demerger basis today, and the company has set May 1 as the record date, which falls on a market holiday.ย
This means that investors holding shares as of April 29 will be eligible to receive shares in the spun-off companies.ย According to the exchange filing, under the composite scheme of arrangement, Vedanta shareholders will receive equity shares in four businesses on a 1:1 basis. ย
The special pre-open session was held today between 9:15 am and 9:45 am to determine the ex-demerger price, as the markets will remain closed on May 1 due to Maharashtra Day. The adjusted price will now be used to determine the valuation of the demerged entities.ย ย
As part of the demerger, Vedanta plans to separately list four entities – Vedanta Aluminium Metal Limited (VAML), Talwandi Sabo Power Ltd (TSPL), Malco Energy Ltd (MEL) and Vedanta Iron and Steel Limited (VISL).
Entities to trade by mid-June post-demerger
Mining major Vedanta will file with stock exchanges next week for listing approval of its demerged entities, with shares expected to list and commence trading by mid-June, a top official of the company said on Wednesday.
During an Investor Call on Q4 financial results, Vedanta Resources CEO Deshnee Naidoo said the demerger is now in its final stage.
(This article is for informational purposes only and should not be construed as investment, financial, or other advice.)