Delisting: 17.15 Cr Shares of Vedanta Tendered So Far, Nearly Half in Rs 138-140 Bracket

The reverse book building exercise to delist Vedanta Ltd’s shares from the BSE and National Stock Exchange saw over 17.15 crore shares being tendered till Wednesday, according to stock exchange data. Of the 17.15 crore shares tendered in the first three of the five-day reverse book building process, about 8.49 crore shares have been tendered in the price range of Rs 138 to 140 a share, the data showed.

Vedanta promoters are seeking to buy 169.73 crore shares or 47.67 per cent stake held by the public to delist the firm. The reverse book building process started on October 5. The closing date for the offer is October 9 and the last date for the announcement of the discovered price and the acquirer’s acceptance or rejection of the discovered price is October 16.

Vedanta closed at Rs 123.60 on the BSE on Wednesday, a loss of 10.40 per cent over the previous day’s close. The promoters have raised USD 3.15 billion to fund the delisting.

According to stock exchange data, the maximum price sought for tendering shares is Rs 999 apiece. Off the 17.15 crore shares offered to be tendered, 11.35 crore have come in at an asking price of up to Rs 140 a share.

The final exit offer price will be decided on the basis of bids placed by public shareholders, which should take the shareholding of promoters to at least 90 per cent of the paid up equity share capital of Vedanta. Industry sources said Vedanta may not be able to raise any more money to fund the delisting exercise as the lenders have put a cap on any further mobilisation.

“There has been some speculation that Hindustan Zinc has raised Rs 3,520 crore via NCDs to help the parent in delisting but funds raised at HZL have nothing to do with the delisting transaction. In fact, it is not legally allowed for HZL or Vedanta to fund the delisting transaction under Indian law,” a source said. Meanwhile, leading brokerages like ICICI Securities, Citi Research and CLSA have come out with revised price targets on the Vedanta stock after the metals-to-mining major reported a 23.5 per cent drop in quarterly profit as one of the world’s strictest lockdowns hit production and demand.

While sales fell 25.9 per cent to Rs 15,687 crore, net profit declined 23.5 per cent to Rs 1,033 crore. The brokerage reports have also taken the current reverse book building process to delist Vedanta from stock exchanges into consideration.

While ICICI has downgraded Vedanta to reduce from hold with a price target of Rs 120, CLSA has given a price target of Rs 133. On the other hand, Citi has maintained buy with a price target of Rs 150 per share.