1:5 Split In 2026: Vedanta Ltd Stock In Focus After Tax Penalty Order; Buy Metal Stock That Hit New 1-Yr High?

Vedanta Ltd.'s stock price will be in focus next week as the company announced receiving a penalty from GST. The metals and zinc maker is in the process of evaluating its next course of action. Vedanta is among the top dividend yield metal stocks, and the company is going to be on the radar in 2026 for its mega demerger of 1:5 ratio. Last week, Vedanta even touched a new 52-week high and is among top performers in its sector for 2025. That being said, should you buy Vedanta stock or book profits?

Vedanta Ltd Share Price:

Last week, on December 26th, Vedanta shares hit a new 52-week high of Rs 607.65 apiece on BSE. It also clocked a new high on the NSE. However, after the closing bell, Vedanta stock ended at Rs 601.10 apiece, up by 0.50% on BSE with a market cap of Rs 2,35,053.43 crore.

Vedanta stock is up by 35.22% on BSE YTD.

The demerger development and GST penalty order will keep Vedanta stock in focus next week.

Vedanta GST Penalty Order:

During the weekend, on Saturday, Vedanta informed BSE and NSE that it has received Order from The Deputy Commissioner of Commercial Taxes, confirming Penalty of Rs 31,52,244 along with Tax demand and applicable Interest.

It said, the he issue pertains to availment and utilization of ineligible Input Tax Credit and the variance in the turnover declared by the Company in various returns filed during FY 2021-22.

In its filing, Vedanta added, "The Company is in the process of evaluating the next course of action to be adopted in this matter. The Company does not expect the said Order to have any material financial impact."

This latest penalty comes two days after Vedanta received two more penalties during the weekdays. On December 25th, Vedanta informed that it received penalty order from The Office of the Commercial Tax, Panaji Ward for Rs 19,33,693.78, which was related to availment and utilization of input tax credit during FY 2018-19.

The other penalty was from Office of the Joint Commissioner, GST & Central Excise, Rourkela to the tune of Rs 10,65,43,888, with allegations of delayed payment of tax liability during FY 2018-19 to FY 2022-23.

Vedanta is processing and evaluating its next course of action for both the penalties.

That being said, in a span of three days, Vedanta received tax-related penalty orders worth Rs 11.16 crore.

Vedanta Ltd Demerger:

Amidst this, in a major good news, Vedanta received NCLT approval for demerger of its business in the ratio of 1:5. Post demerger, Vedanta's businesses will operate as independent, sector specific companies, each positioned to capitalise on its respective market opportunities.

The resulting entities will be as follows:

- Vedanta Aluminium

- Vedanta Oil & Gas

- Vedanta Iron & Steel

- Vedanta Power

- Vedanta Limited who will continue to be the parent company housing Hindustan Zinc Limited and incubating future-facing businesses.

With the NCLT approval, Vedanta has entered the execution phase of a transformational demerger that will result in five separate listed companies including already listed Vedanta Ltd.

As per the latest update, shareholders of Vedanta Limited will receive equity shares in each of the four resulting listed entities (in addition to their shareholding in Vedanta Limited) in proportion to their existing holdings, ensuring continuity of ownership while enabling direct participation in the growth trajectories of individual businesses.

Vedanta Depo Graphite Bidder:

Another key factor why Vedanta could be in focus is that the company has been declared as a successful bidder in respect of Depo Graphite - Vanadium Block. This receipt of Successful Bidder for Depo Graphite - Vanadium Block under Critical Mineral Auctions Tranche IV conducted by the Ministry of Mines, Government of India shall further strengthen the Company's critical minerals portfolio.

BUY Vedanta Stock?

At the latest, brokerage Investec and global broker Citi have recommended BUY on Vedanta, while raising their target price.

Analysts at Investec believes that the latest NCLT approval for demerger is key positive, as Vedanta's management will have the flexibility to explore opportunities to unlock value from select assets. They have raised target price to Rs 635 on Vedanta with BUY rating.

Meanwhile, CITI has recommended BUY for Vedanta with Rs 585 target price. Analysts at Citi believes that Vedanta's businesses are likely to trade at around 5x EV EBITDA on spot valuations and expect the demerger to support in reducing the conglomerate discount.

The next step of demerger is likely to be transfer of assets and liabilities which includes mining leases, power purchase agreements and production sharing contracts for oil and gas.

Vedanta's demerger is expected to complete by March 2026.

Brokerages like ICICI Direct and Emkay Global have set a new target price of Rs 650 and Rs 625 on Vedanta.

Further, analysts at ICICI Direct said, "We remain positive on Vedanta given the robust non-ferrous prices, strategic expansion at aluminium and zinc India, controlled leverage on B/S, return ratios >20%, attractive dividend yield of ~6%. We retained our BUY rating on Vedanta with SOTP based revised target price of Rs 650."

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