Shares of Vedanta faced a sharp tumble during the intraday trading session on Thursday. The company’s stock fell as much as 9 per cent in early trade, but recovered some ground by 1 pm.
The decline was attributed to reports of Twin Star Holdings, one of Vedanta’s promoters, selling a 4.3 per cent stake in the company through block deals.
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The transaction, valued at $501 million or approximately Rs 4,130 crore, was set at a floor price of Rs 258.5 per share, representing a 5 per cent discount to Wednesday’s closing price of Rs 272.8 on the National Stock Exchange.
Prior to the sale, Twin Star Holdings held a 46.4 per cent stake in Vedanta. JP Morgan India acted as the sole broker for this deal.
Vedanta debt issues
It may be noted that Vedanta’s UK-listed parent, Vedanta Resources, faces upcoming debt obligations, including $1 billion worth of bonds due in August and another $1 billion due in January.
In FY24, Vedanta Resources has a total debt repayment target of around $4.2 billion, of which it already paid $2 billion in the first quarter.
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As of now, Vedanta’s stock is trading 7 per cent lower at Rs 253 on BSE, marking a decline of nearly 20 per cent in the past six months.
In Q1 FY24, Vedanta reported a consolidated net profit of Rs 2,640 crore for the quarter ended June, down approximately 40 per cent from Rs 4,421 crore reported in the same quarter last year.
The company’s revenue from operations also witnessed a 13 per cent fall to Rs 33,342 crore for the first quarter compared to Rs 38,251 crore in the previous year.
This decline in profitability was attributed to lower commodity prices and sales volume, leading to an EBITDA of Rs 6,975 crore in the April-June period, a 35% drop from the same period last year.
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By the end of June, Vedanta’s gross debt stood at Rs 73,484 crore, increasing from Rs 66,182 crore in the preceding March quarter. However, the company still holds cash and cash equivalents of Rs 14,292 crore at the end of the June quarter.
