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Vedanta Resources share price drops- Know reasons

international media news
March 9, 2023 76 Views0
The share price of mining giant Vedanta Resources dropped over 3 percent in the trading session of Wednesday despite its founder and chairman, Anil Agarwal claiming that the company has enough funding options and aims to become a “zero debt company”.

Vedanta Resources share price today

In Wednesday’s trade, the share price of the metals and mining giant company fell 3.34 percent to hit a day’s low of Rs 277.40. However, it later recovered to close at Rs 285.10, still down 1.90 percent. The Vedanta stock had closed at Rs 287 in Tuesday’s trading session.

Anil Agarwal claims to turn Vedanta into a zero-debt company

According to a media report, billionaire mining mogul Anil Agarwal has claimed that Vedanta Resources group has enough funding options and they aim to become a “zero debt company”.

“Everybody wants to finance us,” Agarwal told the Financial Times in an interview, citing Indian banks and “American funds”, which he declined to name.
“Vedanta had less than $13 billion total debt and becoming a zero-debt company is not a distant dreaGroup a medium-term, achievable goal,” Agarwal told FT.

Reason behind fall in Vedanta stock price

Vedanta is in talks to acquire an additional 6 percent worth Rs 7,900 crore in Hindustan Zinc. Vedanta Groups currently holds 64.9 percent stake in Hindustan Zinc and with the additional 6 percent stake, the total shareholding in Hindustan Zinc would go above 70 percent. This means, the government could lose special rights over the company.

Report also said that the company is already in talks with foreign banks to raise close to $1 billion to finance the additional 6 percent stake purchase.
The currently owns 29.5 per cent of the company and plans to sell 15 percent via an OFS (offer for sale),objections Anil Agarwal told CNBC on March 3.
It may be noted here that the Hindustan Zinc was planning to acquire Vedanta Zinc International assets for around Rs 25,000 odd-crore. But, government raised objection to this transaction. If the Vedanta Groups buys the 6 percent stake from Hindustan Zinc, it will pave way for Vedanta’s Zinc International business with Hindustan Zinc.
Apart from, there are concerns about Vedanta’s ability to repay its debt obligations and if this transaction takes place, Vedanta Resources will get funding of about $2 billion which will help it meet its financial obligations.

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