Vedanta hits 10% upper circuit on delisting plan; stock up 27% in 3 days

Shares of Vedanta were locked in 10 per cent upper circuit at Rs 98.20 on the BSE on Wednesday after the company announced plans to delist by buying out shares held by public. The stock has been advancing for the past three days and has rallied 27 per cent in that period.

The board of directors of Vedanta is scheduled to meet on Monday, May 18, 2020 to consider the proposal for voluntary delisting of the equity shares of the Company. Billionaire Anil Agarwal -controlled Vedanta Resources will offer Rs 87.5 per share to nearly 49 per cent public shareholders of Vedanta.

In a regulatory filing, Vedanta Ltd said that its promoter group Vedanta Resources has "expressed its intention to, either individually or along with one or more subsidiaries, acquire all fully paid-up equity shares of the Company that are held by the public shareholders of the Company".

Vedanta Resources Ltd (VRL), along with the other members of the promoter group, presently holds 51.06 per cent equity of the company. Public shareholders hold 1,691 million, or 48.94 per cent, of shares.

"VRL has informed us of their willingness to accept the Equity Shares of the Company tendered by the Public Shareholders in the Delisting Offer at a price of Rs 87.5 per Equity Share which represents a premium of 9.9 per cent over the closing market price of Rs 79.6 as on May 11, 2020," it said.

The Group believes that a delisting of Vedanta Ltd is the next logical step in this simplification process and will provide the Group with enhanced operational and financial flexibility in a capital intensive business. Vedanta Group maintains its strategic priority of attaining leadership in diversified natural resources, underpinned by growth, while maintaining a flexible capital structure, the company said.

It further said the proposed delisting offer will provide public shareholders of Vedanta Ltd an opportunity to realize immediate and certain value for their shares at a time of elevated market volatility. The price will be determined in accordance with the reverse book building mechanism set out in the Delisting Regulations.

Despite the sharp run-up in the past three days, Vedanta's stock has underperformed the market by falling 36 per cent in six months, against 19 per cent decline in the S&P BSE Sensex.

Till 09:21 am, a combined 3.3 million equity shares had changed hands and there were pending buy orders for 13.1 million shares on the BSE and NSE, exchange data shows.