Vedanta's Anil Agarwal says each demerged biz will become bigger than UK parent

Billionaire Anil Agarwal on Thursday said that six demerged entities of Vedanta Ltd would eventually become bigger than its UK-based parent Vedanta Resources. Agarwal, 69, took to X (formerly known as Twitter) and wrote: "In my journey of building Vedanta, I have been blessed to have the most fantastic shareholders. Aap sab mere parivar ke sadasya hain (You are all my family members). Like you have always stood by me, I will always be with you."

Sharing his thought behind demerger, he said the decision was driven by aspiration to see faster growth and even higher returns. "The thought behind the demerger of Vedanta into six units is driven by aspiration, not just mine but also yours to see faster growth and even higher returns. I will not rest until the true value of each unit is unlocked. Each will become bigger than the parent. That's the power of 'pure play.' I have no doubt, aapke saath se, hum honge kamyaab (along with you, we shall overcome)," Agarwal stated.

In an exclusive interview with BT TV, Agarwal said the shareholders would have a lot of flexibility after the demerger. He also spoke about Vedanta's plan for bond restructuring and said the company is committed to the interests of the shareholders and bondholders. Agarwal said there would be no problem ever in making payments on time.

"The six companies will have their own CEOs. These CEOs will also be a stakeholder in the company. The companies should be run by the best of experts," he underscored.

Vedanta's six listed units would be Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel & Ferrous Materials, Vedanta Base Metals and Vedanta Ltd.

As part of the vertical split, shareholders would get 1 share of each of the five newly listed companies for every 1 share of Vedanta.

In a separate development, a business daily today reported, citing sources, that JSW Steel, ArcelorMittal and may private equity (PE) funds have expressed interest in acquiring the iron ore mines and steel plant owned by ESL Steel, which is a part of Agarwal's Vedanta Ltd.

As per the June 2023 shareholding data, promoters held 68.11 per cent in Vedanta.

On the stock-specific front, Mileen Vasudeo, Senior Technical Research Analyst at Arihant Capital Markets told BT TV that the stock has been in the downtrend. "I would recommend not to bottom fish in this stock and stay away from it for now," he suggested. Vedanta was last seen trading 0.59 per cent lower at Rs 226.35.

The counter was trading higher than the 5-day, 10-, 20-day simple moving averages (SMAs) but lower than the 30-day, 50-, 100-, 150- and 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 48.28. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 2.91 against a price-to-book (P/B) value of 1.25.

The scrip has an analyst target price of Rs 272, Trendlyne data showed, suggesting a potential upside of 20 per cent in a year. It has a one-year beta of 1.14, indicating high volatility on the counter.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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