Vedanta tanks 15% on heavy volume; logs sharpest intra-day fall since March

The bid for Vedanta's delisting offer opened on Monday, October 5, while the bid closes on Friday, October 9, 2020

Shares of Vedanta clocked their sharpest intra-day fall in over six months, tanking 15 per cent to Rs 117.60 in the intra-day trade, on the BSE on Wednesday on the back of heavy volumes. Earlier on March 23, 2020, the stock had plunged 18 per cent in the intra-day trade, exchange data show.

At 02:17 pm, the stock was trading 9 per cent lower at Rs 125.65, as compared to 0.89 per cent rise in the S&P BSE Sensex. Trading volumes on the counter jumped over six-fold. Till 02:18 pm, a combined 91 million equity shares, representing 2.6 per cent of total equity of Vedanta, had changed hands on the NSE and BSE.

Vedanta's delisting offer through the reverse book-building process began on Monday, October 5, 2020 and will close on Friday, October 2020. The indicative floor price for the bidding process has been set at Rs 87.25 per share.

The promoter holding in Vedanta is currently at 50.14 per cent. Under Sebi's delisting regulation, the promoter will have to acquire at least 39.86 per cent stake (1.48 billion shares) from public shareholders to ensure that the delisting bid is successful.

Vedanta Group said that delisting of Vedanta 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.

"While Vedanta reported a relatively steady performance for April-June quarter (Q1FY21), a quarter marred by shutdowns, the stock price performance will largely hinge on its delisting related news flow," ICICI Securities said in a note.

The last date for counter offer (if any) is October 13, 2020 while the last date of price discovery is October 16, 2020. The proposed date of payment of consideration to shareholders and/or return of equity shares to shareholders in case of bids not being accepted/failure of delisting offer is October 23, 2020. As per media reports, the parent company Vedanta Resources has mobilised US$3.15 billion for the proposed delisting exercise.