Anil Agarwal buys 4.98% stake in Vedanta for Rs2,959 crore2 min read . Updated: 24 Dec 2020, 10:02 PM IST
- With this purchase, Vedanta Resources shareholding in the company will increase to 55.1%
MUMBAI : Vedanta Resources Ltd, the promoter entity of Billionaire Anil Agarwal’s Vedanta Ltd on Thursday bought 185 million shares or 4.98% equity stake of the company for Rs2959 crore from institutional shareholders of the company, according to the bulk deal data available on the exchange.
With this purchase, Vedanta Resources shareholding in the company will increase to 55.1%. As on 30 September, promoters held 50.13% in the company. As per Sebi norms, promoters are allowed to acquire up to 5% a year through creeping acquisition without triggering an open offer.
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 Rs1,177 crore and Rs1,782 crore on BSE and NSE 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 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 in order for the delisting offer to be successful.
Agarwal’s move to increase his stake in Vedanta also comes at a time when he is planning to acquire state owned Bharat Petroleum Corp Ltd (BPCL) through a competitive bidding process under the government’s disinvestment program.
Mint reported on 16 December that Agarwal’s Vedanta group plans to raise as much as $8 billion through a mix of debt and equity to secure funds for the acquisition of 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.
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," JP Morgan said in a report in November.
Buying a 75% stake in BPCL (53% from government and 22% through an open offer) would 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 September 30, 2020 against a net profit of ₹2,158 crore in the year-ago period. Income during July-September declined 4.7% to ₹21,744 crore from ₹22,814 crore in the year-ago period.
Shares of Vedanta Ltd gained 8.11% to close at ₹162.65 on Thursday on BSE, while the benchmark index, Sensex gained 1.14% to close at 46973.54 points.