Vedanta promoter buys 4.98% stake in Indian unit2 min read . Updated: 25 Dec 2020, 07:37 AM IST
- The ₹2,959 crore deal will take Vedanta Resources shareholding to 55.1% from 50.13%
Vedanta Resources Ltd, the promoter entity of billionaire Anil Agarwal’s Vedanta Ltd, on Thursday bought 185 million shares or a 4.98% stake in the company for ₹2,959 crore from the company’s institutional shareholders, according to bulk deal data available on the exchange.
This purchase will take the shareholding of Vedanta Resources to 55.1%. As on 30 September, promoters held 50.13% in the company. Promoters are allowed to acquire up to 5% a year through creeping acquisition without triggering an open offer, according to Securities and Exchange Board of India norms.
Vedanta Holdings Mauritius, a subsidiary of Vedanta Resources, bought 73.58 million and 111.42 million shares at an average price of ₹159.91 aggregating to ₹1,177 crore and ₹1,782 crore on NSE and BSE respectively, showed data on the stock exchanges. The details of the sellers were not disclosed.
The stake purchase by the promoter comes after a failed attempt to delist the company from Indian stock exchanges earlier this year.
In May, the promoters had announced a delisting offer at ₹87.5 a share. The total number of shares validly tendered by the public shareholders in the delisting offer was 125.47 crore, which was less than the minimum number of shares required to be accepted by the acquirers for the delisting offer to be successful.
Agarwal’s move to increase his stake in Vedanta also comes amid plans to acquire state owned Bharat Petroleum Corp. Ltd (BPCL) via competitive bidding under the government’s divestment programme.
Mint reported on 16 December that the Vedanta group plans to raise as much as $8 billion through a mix of debt and equity to secure funds for acquiring BPCL and that the group has initiated talks with a clutch of banks to tie up the funds.
Last month, the mining conglomerate showed preliminary interest in buying the government’s 53% stake in BPCL. The sale, part of India’s asset-sale programme, is expected to fetch the government about ₹45,000 crore.
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Analysts, however, have questioned the group’s ability to raise the entire funding on its own, given its precarious finances. While BPCL’s dividend payments could cover the cost of debt of any acquisition, “the question we have is how would Vedanta Ltd (an Indian unit of Vedanta Resources) secure funding, given the worries on leverage at Vedanta and the parent," JPMorgan said in a report in November. Buying a 75% stake in BPCL (53% from the government and 22% through an open offer) will cost Vedanta ₹64,200- 97,600 crore depending on the price ( ₹395 to ₹600 per share), the report added.
Vedanta Ltd reported 61.8% decline in consolidated net profit at ₹824 crore for the quarter ended 30 September, against a net profit of ₹2,158 crore in the year-ago period.