Vedanta shares drop 3% despite 'zero debt' pledge by Anil Agarwal

Shares of metals & mining giant Vedanta fell over 3 per cent in Wednesday's trade even as chairman Anil Agarwal insisted that Vedanta group has ample funding options and his company aims to become a “zero debt company.” Agarwal told Financial Times that he expected $9 billion of profit across the group for the coming year, adding that the “$1bn is peanuts for us.”

The scrip fell 3.34 per cent to hit a low of Rs 277.40 in Wednesday's trade. It later recovered and was trading at Rs 284.30, still down 0.94 per cent.  The stock is down 10 per cent year-to-date.

The stock has been under pressure for some time amid reports the government is opposed to Hindustan Zinc board's move to buy Vedanta's global zinc business in a $2.98 billion cash deal. Rating agency S&P Global recently said Vedanta parent Vedanta Resources' ability to meet its financial obligations beyond September will depend on a planned $2 billion fundraising as well as the proposed sale of Vedanta's zinc assets in Africa.

Agarwal, however, dismissed concerns about the payment for upcoming debt maturities worth $900 million by June this year. "$1 billion is peanuts for us," he told Financial Times while speaking on the firm's dues by June. He said the company's commodities businesses are throwing off enough cash and that he expects $9 billion of profit across the group for the coming year, according to FT.

Shares of Hindustan Zinc were trading at Rs 310.55, down 0.37 per cent.

This observation unnerved the investors and markets, which saw massive sell-offs in the company stock. In the last one month, shares of Vedanta have crashed nearly 10 per cent.

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