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Vedanta Shares slipped on Monday after reports confirmed that the Anil Agarwal-led mining giant had emerged as the leading bidder for bankrupt Jaiprakash Associates Ltd. (JAL). Investors closely monitor the Vedanta Share Price as it reflects both global demand and domestic market conditions.
Recent Vedanta JAL Acquisition highlights the company’s expansion strategy in the cement sector. The stock dropped 2.21% to Rs 435.05 during the session, extending its underperformance seen over the past year.
Vedanta outpaced competitors, including Adani Group, Dalmia, Jindal Power, and PNC Infratech in a resolution process conducted under India’s Insolvency and Bankruptcy Code (IBC).
The company offered an upfront amount of Rs 4,000 crore, with the remaining amount to be paid over a period of 5 to 6 years, which resulted in a net present value (NPV) of Rs 12,505 crore.
This bid, approved by the Committee of Creditors led by NARCIL, makes Vedanta the highest bidder for JAL. The debt-laden company has interests across cement, real estate, power, roads, and hospitality, and reported outstanding dues of Rs 55,371 crore as of August 15.
Nuvama Institutional Equities noted issues for minority shareholders, pointing out that Vedanta's acquisition of JAL may not align with its priority to deleverage. Entering unrelated sectors at a time when the company needs to focus on strengthening its balance sheet could increase financial strain.
Brokerage firm Nuvama has released its latest outlook on the metals and mining industry. Nuvama cautioned that funding the Rs 17,000 crore requirement would be challenging, though it added that Vedanta could quickly monetize certain JAL assets to offset the impact.
Analysts remain divided on the future of Vedanta’s Stock Performance due to fluctuating commodity prices. The brokerage also believes the deal may delay a meaningful re-rating of Vedanta’s stock, even if JAL’s assets prove valuable over the long term.
Despite highlighting risks, Nuvama maintained its ‘Buy’ rating on Vedanta. It set a target price of Rs 601, implying a potential upside of more than 35% from current levels.
The brokerage emphasized that Vedanta’s long-term focus will likely remain on its core businesses such as power, oil, gas, and metals, while non-core assets could be monetized in phases.
“While the JAL acquisition brings diversification, we see deleveraging as the immediate priority. The finalization of the resolution plan will determine how this acquisition is accounted for in estimates,” Nuvama noted.
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Vedanta’s stock has struggled in recent months. It has declined by over 5% in the past year and lost less than 1% over the past six months, reflecting investor caution amid concerns related to debt. Experts are predicting a positive Vedanta Share Target Price, signaling potential long-term growth. This decline indicates that sentiment remains fragile, even as analysts highlight the longer-term upside potential.
