Vedanta Resources Plc’s decision to delist from exchanges appears to have pleased Vedanta Ltd’s (Vedanta) investors. If Vedanta becomes the vehicle for the group’s future global investments, they will get a slice of that action as well. But that’s a long shot.

On Monday, Vedanta’s shares were initially down, joining other metal shares in the dumps. After Vedanta Resources’ statement, the mood changed and its shares gained 1.25%, while the BSE Metal Index was down by 1.8%.

Ordinarily, Vedanta Resources’ delisting should not matter to domestic investors. The desire to delist, according to a report in The Economic Times, was due to protests in the UK following the controversy over alleged environmental violations at its Tuticorin copper smelter and deaths of protestors in police firing.

The official statement, however, says the delisting will simplify the group corporate structure, and eliminate dual listing. Dual listing is mentioned because most of Vedanta Resources’ valuation is derived from Vedanta. In FY18, 92% of Vedanta Resources’ revenue and 97.4% of its Ebitda (earnings before interest, tax, depreciation and amortization) was attributable to Vedanta.

Vedanta Resources was created to access international capital markets for the group. Subsequent years saw restructuring of group holdings, leaving Vedanta as the main holding company in India. This development and India’s deepened capital markets are the reasons why Vedanta Resources does not require to be listed, according to the statement.

One definite implication is that those wanting to remain invested in the Vedanta group will have to buy Vedanta’s shares. That’s a new source of demand for its shares.

The bigger picture is that any significant fundraising by the Vedanta group, requiring it to access public equity markets, is likely to be done through Vedanta. That gives investors the opportunity to participate in the group’s expansion plans also. This can cut both ways; for example, investors may not want to participate in an investment that the group is interested in.

Now, the promoter group could still make investments privately. For instance, Volcan has an interest of just over 20% stake in Anglo American Plc, according to the Financial Times. When the fund requirement is of a higher order, that’s when a listed company’s balance sheet will be required. That’s where Vedanta will come in.

Still, there is the matter of the promoter group’s eventual designs on Anglo American. If they do acquire control—which they have denied being interested in—they may still own an overseas listed company.

While Monday’s development does elevate Vedanta’s status to that of the group’s uncontested listed flagship, it does not automatically mean it will also be the launch vehicle for the Vedanta group’s global ambitions. The group’s statement also does not hint at any change in its plans for Vedanta. When the group makes its next big move, what part Vedanta plays will give a sure indication of how deep a change this is.

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