Vedanta, Vedanta Oil shares jump up to 8%; here's why

Shares of Vedanta Oil and Gas Ltd surged 8.29 per cent in Thursday's trade to hit an intraday high of Rs 39.60. Vedanta Ltd also gained 0.94 per cent to touch Rs 274.70.

The upmove came after a Bar and Bench report said the Delhi High Court rejected the Centre's objections against the enforcement of a $99 million foreign arbitral award in favour of Vedanta Ltd and Singapore-based Ravva Oil in a dispute related to the Ravva oil field production sharing contract.

According to the report, the Centre had issued a show-cause notice in 2014 claiming $99 million. Vedanta and Ravva Oil subsequently approached the arbitral tribunal for quantification of the claim, resulting in a final award in 2016. The report added that the award was also upheld by courts in Malaysia.

Vedanta Oil is among the four demerged entities of Vedanta that were listed on the stock exchanges on June 15 following the successful completion of the mining conglomerate's restructuring.

The demerger resulted in the listing of independent companies, including Vedanta Oil, Vedanta Iron and Steel Ltd, Vedanta Power Ltd and Vedanta Aluminium Metal Ltd. With this, the Vedanta Group now has five listed companies under the Vedanta brand, including Vedanta.

Meanwhile, BSE and NSE have placed the securities of Vedanta Oil and Gas under the short-term Additional Surveillance Measure (ASM) framework. Exchanges place stocks under short-term or long-term ASM frameworks to alert investors about heightened price volatility and encourage caution while trading.

Separately, the company recently shared its production update for the first quarter of FY27. It reported that average daily gross production declined 17 per cent year-on-year (YoY) to 77.7 thousand barrels of oil equivalent per day (kboepd), compared with 93.2 kboepd in the corresponding period last year.

The company also said total oil and gas volumes fell 17 per cent YoY to 7.1 million barrels of oil equivalent (mmboe) in Q1 FY27 from 8.5 mmboe in the year-ago period.

Commenting on Vedanta Oil, Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, stated, "For any kind of serious investment decision, I prefer to wait for a couple of quarters and monitor how the results pan out."

For those willing to enter, a 'buy-on-dips' strategy would be the way to go, he added.

Ravi Singh, Chief Research Officer at Master Capital Services, noted, "Investors with a medium- to long-term horizon can continue to hold the stock. Fresh investors should avoid chasing the rally and instead look to accumulate on dips for a better risk-reward opportunity."