Vedanta, the Indian mining company, experienced a significant setback on Thursday as its share price plummeted nearly 9% in response to a block deal on the exchanges. Approximately 16.5 crore equity shares, with an estimated value of ₹4,270 crore, changed hands during the transaction, causing Vedanta’s shares to decline to ₹247.80 apiece on the BSE. This downturn places the stock just above its 52-week low of ₹245.85 apiece, recorded on August 4, 2022. The recent plunge came as Twin Star Holdings Ltd, a prominent promoter entity of Vedanta, initiated the sale of a 4.3% stake in the company.
The stake sale, amounting to 16 crore shares, was executed for ₹4,136 crore as part of billionaire Anil Agarwal’s strategic plan to reduce debts and transform Vedanta Group into a pure-play green energy and non-ferrous business. To facilitate the stake sale, Twin Star Holdings offered 160 million shares in Vedanta to institutional investors at a minimum price of ₹258.50 each, which represented a 5% discount from the previous day’s closing price of ₹272.15 on the National Stock Exchange of India Ltd. The deal was brokered by JP Morgan India Pvt. Ltd., and it is seen as a crucial step in Anil Agarwal’s mission to reshape the company’s direction towards sustainable energy and non-ferrous industries.
With Twin Star Holdings holding the position of the primary promoter entity, it currently owns an impressive 1.72 billion shares, accounting for 46.4% of Vedanta’s total shares. This sizeable shareholding is valued at ₹1.01 trillion as of the latest available data from Wednesday. The terms of the deal include a 180-day lock-up period for the seller, ensuring a certain degree of stability in the aftermath of the share sale. It was noted that the share sale might be targeted towards qualified institutional buyers, indicating the potential interest from established and knowledgeable investors.
Despite the ambitious green energy transformation plans and stake sale, Vedanta’s shares have faced challenges this year, as they have declined by 18% year-to-date and experienced a 9% drop within just one month. These fluctuations reflect the uncertainties in the market and the challenges that the company is currently navigating. As the Indian economy continues to evolve, Vedanta’s strategic shift towards green energy and non-ferrous business presents an interesting development in the corporate landscape. The success of this transformation will be closely monitored by investors, stakeholders, and industry experts alike as they evaluate the company’s ability to adapt and thrive in the changing energy and mining sectors.