Understanding Vedanta's Major Demerger: Key Details for Investors
Vedanta demerger: Do you have the unlisted shares in your demat account? Here’s all you need to know
The Economic Times
Image: The Economic Times
Vedanta has completed a significant demerger, creating four new companies, with eligible shareholders receiving one share of each new entity for every Vedanta share held. The share price of Vedanta has risen by nearly 12% since the adjustment, while the new shares await listing on stock exchanges, expected by mid-June.
- 01Vedanta's demerger created four new companies, with eligible shareholders receiving shares in each.
- 02The share price of Vedanta dropped over 63% on April 30 due to the demerger adjustment.
- 03New shares are currently unlisted and cannot be traded until they receive listing approval.
- 04Expected listing of the new entities is by mid-June, pending regulatory approval.
- 05Nuvama Institutional Equities has set target prices for the new entities based on their valuations.
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Mining conglomerate Vedanta has undergone a major demerger, resulting in the creation of four new companies: Vedanta Aluminium Metal, Vedanta Power, Vedanta Oil and Gas, and Vedanta Iron and Steel. Eligible shareholders will receive one share of each new entity for every share of Vedanta they hold. Following the demerger, Vedanta's share price fell by more than 63% on April 30, adjusting to reflect the value of the parent company without the new entities. Currently, the share price has rebounded, gaining nearly 12% to close at ₹323.35 on the NSE. The new shares are listed under a temporary ISIN in shareholders' demat accounts but cannot be traded until they officially list on the stock exchanges. CEO Deshnee Naidoo indicated that listing approvals will be sought soon, with trading expected to commence by mid-June. Analysts at Nuvama Institutional Equities have provided target prices for the new companies, valuing Vedanta's zinc and copper operations at ₹336 per share, aluminium at ₹477, oil and gas at ₹47, steel and iron ore at ₹30, and power at ₹47.
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The demerger may affect existing shareholders' portfolios as they manage the transition to new entities and await their market debut.
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