Vedanta shares drop 3% as analysts raise 'concern' on ₹17,000-cr JAL offer

Vedanta shares fell 3 per cent after Nuvama raised "concerns" on the company emerging as the top bidder for bankrupt JAL

Shares of Anil Agarwal-owned Vedanta fell nearly 3 per cent on Monday after analysts raised concerns about the company emerging as the top bidder for bankrupt Jaiprakash Associates (JAL).

 

The mining conglomerate offered ₹17,000 crore to outbid the Adani conglomerate and emerge as the top bidder for bankrupt Jaiprakash Associates, Business Standard reported earlier. The bid, with a net present value of ₹12,505 crore, is the highest recovery plan placed so far for the debt-laden company, which has admitted claims of over ₹59,000 crore.  Track LIVE Stock Market Updates Here

 

The auction saw only Vedanta and Adani actively participate, even though other shortlisted suitors — Dalmia Bharat group, Jindal Power, and PNC Infratech — had qualified for the process. These companies chose not to submit bids in the final round.

 

Vedanta getting into “unrelated businesses” when its priority should be deleveraging is a cause for concern, analysts at Nuvama Institutional Equities said in a note. The brokerage noted that the deal is not yet final, as the committee of creditors is likely to take around two months to finalise the resolution plan.

 

Nuvama believes Vedanta’s focus will stay on core businesses (power), and it is likely to monetise other assets in due course. It also said Vedanta will be able to fund the acquisition, but the brokerage remains unconvinced about the rationale to acquire this group of assets. 

 

This event is negative for minority shareholders, even if the assets prove lucrative in the future should they get monetised, the note said. The culmination of the transaction is likely to restrict any rerating of the stock, despite improved fundamentals of existing operations, it added, while maintaining a ‘buy’ rating with a target price of ₹601 per share.

 

The development is rather unexpected, ICICI Securities noted, adding that JAL’s business portfolio does not align well with Vedanta’s operations. 

 

The acquisition could still aid in debt management, with Vedanta likely to pay ₹2,700–3,300 crore annually for the next five years, effectively lowering the net present value of the deal to below ₹17,000 crore, ICICI Securities said. However, most of Jaiprakash’s businesses have been loss-making for years, with some entangled in legal challenges, making the outlook uncertain, it added.

 

Vedanta, known for its businesses in metals, steel, mining, and oil and gas, is in the midst of restructuring its listed entity into five separate pure-play companies to unlock shareholder value. 

 

Share price history

 

The group’s flagship stock fell as much as 2.73 per cent during the day to ₹433.35 per share, the steepest intraday fall since August 26 this year. The stock pared some losses to close 2.49 per cent lower at ₹434.4 apiece, compared to a 0.13 per cent advance in the Nifty 50 on Monday.

 

The counter has fallen 2.26 per cent this year, compared to a 4.7 per cent advance in the benchmark Nifty 50. Vedanta has a total market capitalisation of ₹1.69 trillion, according to BSE data.  Vedanta’s bid for Jaiprakash Associates 

Vedanta’s bid for Jaiprakash Associates Ltd. (JAL) could unlock significant synergies for its power business while complementing its mining operations. JAL’s diversified portfolio spans five key verticals, several of which align with Vedanta’s existing businesses, said a source close to Vedanta, asking not to be quoted. 

 

Vedanta has a strong focus on energy—including oil and gas, renewables, thermal, nuclear, and hydro power—segments that hold vast potential in India. The acquisition of JAL would strengthen this positioning. Vedanta is already among India’s largest private power producers, with nearly 12 GW of capacity across captive and merchant power.

 

Vedanta is likely to prioritise the power plant, given its strategic fit with existing operations, while other assets may be monetised in due course. 

Vedanta has been actively expanding its power portfolio. It recently announced full operationalisation of the 1,000 MW Meenakshi Energy thermal power plant in Andhra Pradesh, acquired in 2023 and turned around within two years through accelerated commissioning. Similarly, the company acquired Athena Power in Chhattisgarh via NCLT and has since operationalised 600 MW.