Vedanta shares in focus on reports parent to meet bondholders next week
Vedanta Resources has largely addressed the funding gap of FY2024 through various one-time measures, including a 6 per cent stake sale in Vedanta.
- Sep 8, 2023,
- Updated Sep 8, 2023 9:55 AM IST
Shares of Vedanta fell marginally in Friday's trade amid media reports that suggested parent Vedanta Resources will be meeting offshore bondholders in Hong Kong and Singapore next week. The company is considering an option to redeem a small portion of the bonds ahead of scheduled payment, partly to lure bondholders to agree to roll over the bonds, ET reported.
Vedanta Resources’ high leverage and funding gap of $3 billion in FY2025 are key areas of concern and overhang, Kotak Institutional Equities said this week. It noted that the Vedanta parent has largely addressed the funding gap of FY2024 through various one-time measures, including a 6 per cent stake sale in Vedanta but said the $2.2 billion bonds maturity in FY2025 is a taller hump.
"We note that large dividends are no longer possible and Vedanta Resources might be forced to further divest stake/assets in Vedanta. The bleak commodity cycle suggests a downside risk to earnings. We have trimmed earnings and fair value to Rs 200 from Rs 215. Maintain SELL, given the unfavorable risk-reward," Kotak said on Vedanta this week.
On Friday, the scrip was trading at Rs 238.70 on BSE, down 0.17 per cent.
As per the ET report, parent Vedanta Resources has $1 billion 13.875 per cent bonds due in January 2024, $1 billion 6.125 per cent bonds due August 2024 and $1.2 billion 8.95 per cent bonds in March 2025. The ET report suggested that Standard Chartered Bank and JP Morgan will be organising the meeting with bondholders between September 11 and 15, they said.
Meanwhile, Vedanta has formed a wholly-owned subsidiary in the name of Sesa Iron and Steel Limited on September 6. It will undertake growth projects and expansion of operations, as per the company.
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Disclaimer: Under no circumstances should any person at this platform make trading decisions based solely on the information discussed herein. You should consult a qualified broker or other financial advisor prior to making any actual investment or trading decisions. All information is for educational and informational use only. Business Today does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same.
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Shares of Vedanta fell marginally in Friday's trade amid media reports that suggested parent Vedanta Resources will be meeting offshore bondholders in Hong Kong and Singapore next week. The company is considering an option to redeem a small portion of the bonds ahead of scheduled payment, partly to lure bondholders to agree to roll over the bonds, ET reported.
Vedanta Resources’ high leverage and funding gap of $3 billion in FY2025 are key areas of concern and overhang, Kotak Institutional Equities said this week. It noted that the Vedanta parent has largely addressed the funding gap of FY2024 through various one-time measures, including a 6 per cent stake sale in Vedanta but said the $2.2 billion bonds maturity in FY2025 is a taller hump.
"We note that large dividends are no longer possible and Vedanta Resources might be forced to further divest stake/assets in Vedanta. The bleak commodity cycle suggests a downside risk to earnings. We have trimmed earnings and fair value to Rs 200 from Rs 215. Maintain SELL, given the unfavorable risk-reward," Kotak said on Vedanta this week.
On Friday, the scrip was trading at Rs 238.70 on BSE, down 0.17 per cent.
As per the ET report, parent Vedanta Resources has $1 billion 13.875 per cent bonds due in January 2024, $1 billion 6.125 per cent bonds due August 2024 and $1.2 billion 8.95 per cent bonds in March 2025. The ET report suggested that Standard Chartered Bank and JP Morgan will be organising the meeting with bondholders between September 11 and 15, they said.
Meanwhile, Vedanta has formed a wholly-owned subsidiary in the name of Sesa Iron and Steel Limited on September 6. It will undertake growth projects and expansion of operations, as per the company.
Disclaimer: Recommendations provided in this article and/ or any reports attached or relied on herein are authored by an external party. The views expressed herein are those of the respective authors/ entities, and do not represent the views of Business Today (BT). BT does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. BT further urges you to consult your financial adviser and seek independent advice regarding the contents herein, including stock investments, mutual funds, general market risks etc.
Disclaimer: Under no circumstances should any person at this platform make trading decisions based solely on the information discussed herein. You should consult a qualified broker or other financial advisor prior to making any actual investment or trading decisions. All information is for educational and informational use only. Business Today does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same.
Also read: Adani Power, YES Bank, Kaynes Technology: Trading strategies for these buzzing stocks
Also read: Mazagon Dock shares in news on signing MSRA with US government. Key details