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Vedanta Demerger: Stock to Split Tomorrow!
29 Apr
Summary
- Record date for demerger is April 30, with trading ex-value starting then.
- Shareholders receive one share each of four new entities per Vedanta share.
- Analysts predict post-demerger share price between Rs 250-325.
Vedanta's significant demerger, marking a major restructuring in India's metals and mining sector, is set for Thursday, April 30, 2020. As the record date, April 30th, will see trading commence ex-value for the four demerged entities: Vedanta Aluminium Metal, Talwandi Sabo Power, Malco Energy, and Vedanta Iron and Steel. Shareholders will receive one share of each new company for every share they hold in Vedanta.
Following a special pre-open session to determine price adjustments, analysts project Vedanta's shares to trade between Rs 300 and Rs 325. Some estimates suggest the residual base metal business and its Hindustan Zinc stake could be valued between Rs 250-290 per share. The remaining value, approximately Rs 400, will transfer to the spun-off entities, which are expected to be listed within four to eight weeks.
Vedanta reported a strong March-ended quarter with a 92% year-on-year rise in net profit to Rs 6,698 crore and a 47% surge in revenue to Rs 24,609 crore. The company also achieved its best-ever EBITDA at Rs 18,447 crore. Post-demerger, Vedanta and Vedanta Aluminium are expected to be large caps, while the other three entities will be small caps.
