Vedanta share price jumps as board okays up to Rs 3,500 crore worth NCDs

Shares of Vedanta Ltd gained 2 per cent in Friday's trade after a authorised committee of directors (COD) of the company at its meeting today approved the issuance of unsecured, rated, listed, redeemable, non-convertible debentures (NCDs) on a private placement basis, up to 3,50,000 units of face value Rs 1,00,000 each, aggregating upto Rs 3,500 crore in one or more series.

The company had on September 15 informed exchanges about the proposal for issuance of non-convertible debentures on a private placement basis undertaken in ordinary course of business.

Vedanta rose 2.04 per cent to hit a high of Rs 261.85 on BSE, trimming its three-month losses to 14.87 per cent. The scrip has 12-month consensus target of Rs 367.40, implying 41.2 per cent potential upside. Citi has a 'Sell' rating on the stock with a target of Rs 235. Kotak Institutional Equities finds the stock worth Rs 305. CLSA and ICICI Securities have target of Rs 345 on the stock.

Folliwing its recent demerger, Vedanta's Ebitda  doubled YoY in the June quarter and was 7 per cent ahead Bloomberg consensus, driven by slightly better performance across Zinc India, Zinc International and FACOR.
JPMorgan in a July 31 note said Vedanta's net debt declined 21 per cent sequentially and its net debt to Ebitda was comfortable at 0.3 times.

" We anticipate near-term profitability tailwinds as LME Zinc prices remain above $3,600/t (v. 10 at $3.466/t), Vedanta is undertaking several capacity programs including Zinc India 250KT smelter capacity expansion and a 330KTPA FACOR smelter plant targeted over FY28-29. We tweak our model post the results and incorporate LME Zinc price assumptions of $3,450/$3,150/t in FY27/28," it said.

The brokerage suggested a target price of Rs 312 on the stock.