5 days ago
Vedanta Demerger Report Card: Which Entity Emerged Strongest?
Vedanta split its business into four new companies while keeping Vedanta Limited as the remaining company.
The split took effect on May 1, and the four new companies began trading on June 15.
The companies did not all perform the same way after listing.
Vedanta Oil & Gas gained 2.47% over three months, the best result in the group.
Vedanta Iron and Steel gained 1.60%.
Vedanta Aluminium Metal had a strong listing but later fell 3.16%.
Vedanta Power lost 17.13%, the largest decline.
Vedanta Limited also fell 8.80% after rising sharply in May.
Analysts said aluminium could benefit from its integrated operations, while the power business may provide steadier earnings over time.
Vedanta Limited fell 8.80% over three months after initially rallying toward ₹360 in May.
Vedanta Aluminium Metal listed at ₹522 and declined 3.16% over three months despite a strong debut.
Vedanta Iron and Steel gained 1.60%, supported by upper circuits and an attempted base near ₹30–31.
Vedanta Power was the weakest performer, falling 17.13% over three months despite a one-week rebound.
Vedanta Oil & Gas gained 2.47%, making it the strongest three-month performer among the five stocks.
- Who
- Vedanta Limited and the four companies created through its demerger: Vedanta Aluminium Metal, Vedanta Iron and Steel, Vedanta Power, and Vedanta Oil & Gas.
- What
- A comparison of the five companies’ share-price performance during their first more than three months of trading after the demerger.
- Where
- The companies traded on the Bombay Stock Exchange and the National Stock Exchange; the cited closing prices are from the Bombay Stock Exchange.
- When
- The demerger took effect on May 1; the four new companies were listed on June 15 and had traded for more than three months by the report’s assessment.
- Why
- The comparison assesses which demerged company and the residual Vedanta Limited performed best after the corporate restructuring.
Positive interpretations
Cautious interpretations
Aluminium outlook
Positive interpretations
Vedanta Aluminium Metal’s captive alumina and coal linkages could support margin recovery as global metal prices stabilize.
Cautious interpretations
The stock declined 3.16% over three months after its strong listing and experienced initial chart volatility.
Power business
Positive interpretations
The power business may provide consistent, utility-style earnings with relatively low operational volatility during market downturns.
Cautious interpretations
Vedanta Power was the weakest three-month performer, losing 17.13% despite a 10.4% one-week rise.
Iron and steel recovery
Positive interpretations
Vedanta Iron and Steel gained 1.60%, with upper circuits and an attempted base around ₹30–31 suggesting some momentum recovery.
Cautious interpretations
The broader trend remained bearish, and a sustained move above ₹33.5 was identified as necessary to strengthen the recovery.
Key facts
- Demerger effective date
- May 1
- Listing date for four new entities
- June 15
- Best three-month performer
- Vedanta Oil & Gas, up 2.47%
- Weakest three-month performer
- Vedanta Power, down 17.13%
- Aluminium performance
- Vedanta Aluminium Metal declined 3.16% over three months and rose 7.8% over two weeks
- Iron and steel performance
- Vedanta Iron and Steel gained 1.60% over three months
- Residual company performance
- Vedanta Limited declined 8.80% over three months
Quotes
Mayank Jain
Market Analyst at Share.Market by PhonePe
“Vedanta Limited initially experienced strong upward momentum during May, rallying toward ₹360 as immediate post-split value discovery took place. However, as broader market consolidation set in over subsequent months, the stock pulled back, entering a sideways trading range around ₹290 to ₹260.”
livemint.com
“The broader trend remains bearish, but the stock is attempting to form a base around ₹30–31. RSI at 42.7 indicates some momentum recovery. Resistance is ₹33–33.5; a sustained move above ₹33.5 could strengthen the recovery.”
livemint.com
Sources
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