Vedanta, Hindustan Zinc shares slip 1% after Anil Agarwal-led company confirms ED visit to offices

Shares of Vedanta and its subsidiary Hindustan Zinc fell 1% each on Wednesday, 3 June, after Anil Agarwal-led company confirmed that officials from the Enforcement Directorate (ED) had visited certain offices of the company and its subsidiary, following media reports regarding a Foreign Exchange Management Act (FEMA) investigation.

The clarification came after stock exchanges sought a response from the mining and metals major regarding news reports claiming that the ED had conducted searches at premises linked to the Vedanta Group.

In a filing to the exchanges, Vedanta stated, "We hereby inform that the Enforcement Directorate team visited some offices of our company and Hindustan Zinc, a subsidiary of the company." The company also said that it is extending full cooperation to the authorities and furnishing all information sought during the process.

The disclosure followed reports published on Tuesday that cited officials as saying that the ED had carried out searches at locations associated with the Vedanta Group in Delhi and Mumbai as part of an ongoing FEMA-related investigation.

Vedanta further informed investors that the proceedings remain in progress. In a separate exchange filing issued on Tuesday, the company said that the matter is currently underway and reiterated its commitment to regulatory compliance and timely disclosures.

"We wish to reiterate that the Company is and will continue to comply with SEBI Listing Regulations and keep the stock exchange(s) duly informed of all material information / events, including price sensitive information(s), in accordance with the applicable provisions," the company said in its filing.

In a social media post in late March, Vedanta chairman Anil Agarwal stated that the company had received written confirmation of winning the bid for a Jaypee Group asset. However, he claimed that the decision was later overturned in favour of another bidder, widely seen as the Adani Group, though he did not explicitly name the conglomerate. Subsequently, Vedanta approached the Supreme Court seeking a stay on the resolution plan submitted by the Adani Group for the Jaypee Group assets.

Vedanta, Hindustan Zinc share performance

Vedanta share price declined 1% to its day's low of ₹330.00 per share on BSE, while Hindustan Zinc also lost 1% to its intra-day low of ₹618.95 per share.

Vedanta shares have lost 6% in one week but risen around 23% in one month. Hindustan Zinc shares, on the other hand, have fallen around 4% in one week but added 5% in one month.

Vedanta has generated returns of 102% over the past one year and 217% over the last five years. Hindustan Zinc has also delivered strong gains, rising more than 33% in the past year, while offering returns of 93% over a five-year period.

Vedanta Demerger

Under the demerger scheme, Vedanta will be split into five distinct entities: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron and Steel, and the parent entity, which will continue to operate as Vedanta Ltd. Each of these verticals will be independently listed, allowing investors to gain direct exposure to specific business segments.

The share entitlement ratio for the demerger has been set at 1:1, marking one of the biggest corporate restructurings in India’s metals and mining sector. Investors are now awaiting the listing of the four new companies that spun out of the mining conglomerate.

Additionally, Vedanta will transfer its stake in Bharat Aluminium Company Ltd (BALCO) to Vedanta Aluminium Metal Ltd as part of the restructuring exercise, further streamlining its business verticals.