Vedanta shares hit fresh all-time high as winning streak extends to seventh session; rallies over 13%

Shares of mining giant Vedanta maintained their strong upward momentum on Wednesday, December 17, extending gains for the seventh consecutive trading session. The stock jumped another 2% on the day to hit a fresh all-time high of ₹580.45 per share, taking the cumulative seven-day gain to 13.5%.

Besides Vedanta, key metal stocks also traded higher as base metal prices remained firm amid a softening U.S. dollar. Investor sentiment toward Vedanta has remained upbeat amid multiple positive developments, including the National Company Law Tribunal’s (NCLT) approval of the company’s plan to split into five separately listed entities.

Vedanta bags NCLT nod for demerger

A two-member panel of the NCLT gave the nod to the Vedanta demerger. “The scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy,” the court said in its written order.

At its last hearing in November, the Mumbai-bench on NLCT had reserved its order amid opposition from the Ministry of Petroleum and Natural Gas.

“The approval marks a key milestone in Vedanta’s transformation into focused, sector-leading companies with clear strategic mandates and dedicated capital structures,” a company spokesperson told Bloomberg, adding that the miner will now proceed with the necessary steps to implement the demerger plan.

There is an option to appeal against this ruling.

Tuesday’s ruling paves the way for Vedanta to split its extensive operations into five separate entities, with four of them focused on aluminium, power, oil and gas, and iron ore, respectively.

The company has said that the proposed demerger is aimed at reducing debt, creating focused and independent businesses, and unlocking value for stakeholders.

Vedanta shares gain favour with brokerages as demerger, valuation upside come into focus

Following the approval, domestic brokerage firm Kotak Institutional Equities upgraded its rating on Vedanta to 'Buy' from ‘Add' and also raised its price target to ₹650 from ₹550 earlier. The brokerage added that debt concerns related to its parent, Vedanta Resources, are now largely behind.

Back in 2023, the Vedanta Group announced plans to demerge the company into five separately listed entities housing its various businesses—Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron and Steel, and a restructured Vedanta Ltd, which will hold the zinc and silver businesses (via Hindustan Zinc) and also serve as an incubator for new technologies and ventures.

According to a Nuvama Research report dated November 20, Vedanta demerger could help unlock value by improving the valuations of businesses such as aluminium, steel, and power. The brokerage estimated a fair value of ₹686 per share, which could be enhanced by ₹84 per share once the demerger comes into effect.

"We estimate our fair value of ₹686 (ceteris paribus) shall be enhanced by ₹84/share once the demerger comes into effect," said Nuvama.

The demerger is envisioned as a simple vertical split—for every share of VEDL, a shareholder will additionally receive one share each of the five newly listed companies.

Meanwhile, in its latest report, ICICI Direct Search also retained its 'buy' rating on the stock with a target price of ₹650 apiece. "We remain positive on Vedanta given the robust non-ferrous prices, strategic expansion at aluminium and zinc India, controlled leverage on B/S, return ratios >20%, and attractive dividend yield of 6%," the brokerage said.

Vedanta share price on track to post annual gains for the second year

The company’s shares have delivered a return of 29% so far this year, building on a solid 72% jump in 2024.

Although the shares began the year on a tepid note, they picked up momentum following a strong rally in base metals, having closed the last three months higher, with September registering the biggest monthly jump of 11%.

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