Last Update: February 28, 2023, 13:45 IST
Vedanta is a diversified natural resources company.
Vedanta share price has been in the red for eight consecutive trading sessions, falling nearly 9 per cent on February 28
Vedanta share price remained in the red for eight consecutive trading sessions, falling nearly 9 per cent on February 28 amid its $2 billion fundraising expectation in the coming weeks.
The stock was trading at its lowest level since October 3, 2022. So far in the month of February, it has fallen 21 per cent from the level of Rs 332.60. In comparison, the S&P BSE Sensex was up 0.08 per cent at 59,337 at 10:38 am. The average trading volume over the counter increased by 1.7 times, with a combined 17.06 million shares changing hands on NSE and BSE till the writing of this report.
Vedanta shares are under selling pressure due to negative sentiments following stalled acquisition of state-owned Hindustan Zinc and sharp rise in the US dollar, which has pushed Vedanta bond yields down to ‘junk’ levels, according to market experts. Went.
S&P Global Ratings has said in a report that Vedanta Resources, led by mining billionaire Anil Agarwal, is unable to go ahead with the $2 billion fundraising exercise or the sale of its international zinc assets to Hindustan Zinc Ltd in the near future. , then the company’s credit rating will face immediate stress.
As per reports, the government is not in favor of Vedanta Resources’ plan to sell its global zinc assets to HZL, its Indian subsidiary, for around $3 billion. The government has raised various concerns, including over valuation of assets, as it holds 29.54 per cent stake in HZL, which was privatized 20 years ago.
After Vedanta Ltd declared a dividend in January, S&P reported that Vedanta Resources is fully funded through March 2023. However, the company only has $15 million in debt maturing between July and September, meaning it will need to raise around $500 million at a minimum. To fulfill its obligations by June.
At the end of Q3 FY23, the net debt of Vedanta Ltd increased by Rs 6000 crore due to company’s continued capital expenditure and dividend payout. However, in the first nine months of FY23, Vedanta Ltd reduced its debt in holding company Vedanta Resources Ltd (VRL) by $1.7 billion, in line with its commitment to reduce debt by $4 billion over three years.
“The global macro environment is likely to weigh on any significant correction in LME prices. Opening up of China is expected to support demand and prices, but fears of a slowdown in Europe are raising concerns, said analysts at Motilal Oswal Financial Services in the Q3 results update.
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