Vedanta up 8% as Moody's sees no impact on credit quality post biz spin-off

Vedanta had recently announced that its board of directors have formed a subcommittee to evaluate a potential spinoff of its aluminum, iron and steel, and oil and gas businesses into separate listed c

Vedanta surged nearly 8 per cent to a high of Rs 354 in early deals on the BSE on Tuesday after nearly 7 per cent of total equity of metal company changed hands via multiple block deals. The stock has rallied 15 per cent in past two trading days in otherwise weak market.

At 09:35 am; the stock was trading 7 per cent higher at Rs 351.55, as compared to 0.27 per cent decline in Nifty50 index. A combined 251.86 million equity shares or 6.77 per cent of total equity of Vedanta have changed hands on the NSE and BSE, the exchanges data shows. The names of the buyers and sellers are not ascertained immediately.

According to a Business Standard report, the promoters of Vedanta, Twin Star Holdings Limited and Vedanta Netherlands Investments B.V. are looking to purchase upto 170 million equity shares of Vedanta Limited at an indicative price of Rs 350 per share, valued at Rs 5,950 crore.

The promoter group companies have a purchase offer size of up to 4.57 percent of total shares outstanding as of Sep-30, 2021. J.P. Morgan India Private Limited is acting as the broker to purchasers Twin Star Holdings Limited and Vedanta Netherlands Investments B.V.

Meanwhile, Moody's said that the company business spin-off plan will not have any impact on the parent company's credit quality. READ ABOUT IT HERE

Recently, Vedanta Resources Limited's 65.2 per cent owned-subsidiary, Vedanta Limited (VDL) had announced that its board of directors have formed a subcommittee to evaluate a potential spinoff of its aluminum, iron and steel, and oil and gas businesses into separate listed companies.

The spinoff of VDL's businesses into separate listed companies, which will result in three new listed entities with a shareholding mirroring that of VDL is not likely to affect credit quality of Vedanta Resources assuming it proceeds as currently expected. This is because Vedanta Resources' economic interests in all businesses will remain unchanged.

“We expect VDL's standalone debt to be transferred to the three listed companies equitably,”, Moody’s  added.

For the quarter ended September 2021, VDL had reported a whopping 473 per cent surge in Q2 net profit at Rs 327.90 crore as against Rs 57.20 crore in the corresponding quarter a year ago. Total income grew by 74 per cent to Rs 1,518.30 crore from Rs 872.10 crore in the same period.