Mumbai: The Vedanta group managed to unlock about 20% value amidst its five companies, even as the shares of its four newly-demerged businesses gave up their early gains to end with losses on their stock exchange debut.
While shares of Vedanta Aluminium Metal, Vedanta Oil and Gas, Vedanta Power and Vedanta Iron and Steel ended 1-5% lower on the BSE on Monday, the combined value of these four entities along with the residual entity-Vedanta stood at around ₹902. This represents gains of 20% over ₹773.25, the last traded value of the consolidated entity of Vedanta on April 29.
With this restructuring, Vedanta Aluminium Metal has become the most valuable company of the group, while Vedanta Iron and Steel has the least market capitalisation. Vedanta is the largest producer of aluminium in the country, and the share value of the business was in line with what analysts had estimated.
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While the power business listed at a higher-than-expected value, that of the oil and gas business was at the lower end of the estimated range. Iron and steel, which is the smallest business for the company, listed at a higher-than-expected price, but ended with sharp losses.
“24 years ago, Vedanta was the first Indian company to be established at London Stock Exchange. You can say that the seed of Vedanta was sown that day,” Anil Agarwal, the non-executive chairman of Vedanta said.
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Investors got one share in each of the four new entities for each held in Vedanta in one of India’s largest corporate restructuring exercises, which has taken place nearly three years after it was first announced. The demerger was aimed at simplifying corporate structure, while unlocking value, as each of them became pure-play businesses.
“The seed that we sowed 24 years ago has now taken the form of a huge tree. And today I am happy to see that every branch is ready to become another strong tree on its own,” he said at the listing.
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