BackWill Vedanta shares rebound after demerger. Here's what experts say
Vedanta shares witnessed sharp upside movement on Friday as news of possible Vedanta demerger was already floating on Dalal Street
PremiumVedanta share: Vedanta demerger was announnced on Friday after the market close. In this unlocking of business, Vedanta Limited announced to demerge and diversify its business into six separate entities — Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Ltd. Vedanta demerger is a vertical saplit in which every Vedanta shareholder will be given one share of the new entities for every one share they hold.
Will Vedanta shares rebound?
As the demerger was announced after the close of Indian stock market on Friday, Vedanta demerger impact is yet to be seen on Dalal Street. As Idnian stock market holiday is falling on Monday, the Vedanta demerger impact would be visible on Tuesday only. However, when we talk to stock market experts, they said that value unlocking may help Vedanta to attract segment-oriented investors as they have unlocked their business company after announcing this demerger. However, they also maintained that fundamentals of the six companies coming into existance after Vedanta demerger will remain same.
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Speaking on Vedanta demerger, Arun Kejriwal, Founder at Kejriwal Research and Investment Services said, "Vedanta demerger is an aim to catch attention of those stock market investors who add stocks in their portfolio on the basis of segment. So, this exercise of value unlocking should be seen as rebranding of company with special focus on the segment only.
On how it would impact Vedanta shares, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "For short term, there can be some movement in the stock, but from medium to long term perspective, there won't be impact on Vedanta shares as fundamentals of the companies are going to remain same. This unlocking of business is on paper only as these business entities are already in existence on ground."
Gorakshkar said that it is yet to be seen how global investors and sovereign wealth fund managers react to this Vedanta demerger move.
Vedanta share price ended on Friday at ₹222.65 apiece on NSE and it ended at ₹222.50 on BSE. Vedanta shares witnessed sharp upside movement on Friday as news of possible value unlocking by Vedanta was already floating on Dalal Street.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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