This Metal Company Shares Slump Following Rs 2,255 Crore Block Deal; Promoters Eye $1 Bn Stake Sale

Shares of Vedanta Resources took a hit on the National Stock Exchange (NSE) today after a significant block deal involving 8.2 crore shares. The development follows reports from ET Now suggesting that Vedanta's promoters are considering selling a stake worth $1 billion to Rajiv Jain's investment firm, GQG Partners.

In the morning trade at 9:25 am, Vedanta Ltd witnessed a change in 2.2% equity stake, amounting to Rs 2,255 crore, in block deals. However, the buyer remains unidentified, leaving the market abuzz with speculation about the potential shift in ownership dynamics.

This move comes at a crucial juncture for Vedanta, grappling with outstanding debts totalling $6.4 billion, including a hefty $4.5 billion payment due by fiscal 2025. As of December 2023, the promoters and associated entities collectively held a substantial 63.71% stake in Vedanta, making any significant stake sale a noteworthy event.

GQG Partners, a foreign portfolio investor, has been actively increasing its stakes in various Indian companies over the past year. Notably, they have invested in companies like Adani Ports and GMR Airport Infrastructure, indicating an expanding portfolio in the Indian market.

On another front, Vedanta faces a potential resurgence of its Sterlite copper smelting plant in Tuticorin, which was shut down in 2018 amidst protests that led to 13 casualties due to police firing. The Supreme Court, on February 14, hinted at the possibility of forming a panel to assess the feasibility of restarting the plant. Vedanta, the parent company of Sterlite, awaits further developments in this matter.

In its Q3 financial report, Vedanta witnessed a 40.81% decline in consolidated net profit, amounting to Rs 2,464 crore. The revenue for the quarter remained flat at Rs 33,691. These financial struggles have contributed to the recent decline in Vedanta's stock value.

As of 12:40 pm on the NSE, Vedanta's shares were trading at Rs 268.60 per share, reflecting a nearly 4% drop. Over the last year, the stock has experienced an overall decline of 11%.

The impending stake sale to GQG Partners, coupled with the uncertainty surrounding the Sterlite plant, adds complexity to Vedanta's current situation. Investors and industry watchers are closely monitoring these developments as they could significantly impact the company's future trajectory.