Vedanta Oil & Gas, Power, Iron shares zoom up to 20%; should investors chase the rally?

Recently listed shares of Vedanta Ltd's demerged entities witnessed strong buying interest in Wednesday's trade. Vedanta Oil and Gas Ltd led the gains, soaring 20 per cent to Rs 38.76. Vedanta Power Ltd jumped 17.12 per cent to Rs 47.20 before paring some gains and was last seen trading 7.47 per cent higher at Rs 43.31. Vedanta Iron and Steel Ltd hit its 10 per cent upper circuit limit, while Vedanta Aluminium Metal Ltd was up 1.02 per cent at Rs 455.

Meanwhile, Vedanta Ltd traded lower, slipping 1.92 per cent to Rs 275.40.

Some market participants advised investors against chasing the sharp rally and instead recommended adopting a 'buy-on-dips' strategy.

Ravi Singh, Chief Research Officer at Master Capital Services, noted that investors have responded positively to select standalone entities following the Vedanta demerger.

He, however, added, "After such a sharp upmove, some short-term profit booking or consolidation cannot be ruled out. Investors with a medium- to long-term horizon can continue to hold the stock, as the business fundamentals remain encouraging. Fresh investors should avoid chasing the rally and instead look to accumulate on dips for a better risk-reward opportunity."

Echoing a similar view, Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said, "For any meaningful investment decision, I would prefer to wait for a couple of quarterly results to assess the companies' performance." He added that investors keen on taking exposure should consider adopting a 'buy-on-dips' strategy.

Vedanta's demerger process has been completed with the listing of four separate entities.

"Each of the five sectors is exciting and holds tremendous potential. We remain committed to being a dividend-paying entity and creating value for all the companies," said Anil Agarwal, Founder and Chairman of Vedanta Group.

Highlighting the opportunities in India, Agarwal said the group plans to invest $20 billion over the next five years. "Each of these companies has the potential to reach $100 billion in revenue," he added.