Vedanta and Hindustan Zinc shares rise as latter approves corporate restructuring plans

Vedanta's Chairman, Anil Agarwal, mentioned last month the possibility of separately listing some or all its businesses, spanning metals, mining, and oil and gas.

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Shares of Vedanta Ltd and Hindustan Zinc surged on September 29 after board of Hindustan Zinc authorised to evaluate corporate restructuring.  Vedanta went up by 6 percent while Hindustan Zinc shares were trading 4 percent higher.

At 2:25 pm, Vedanta was trading at Rs 222.15 while Hindustan Zinc was at Rs 309.90.  This is the best single-day gain for Vedanta in 2023.

Vedanta shares had gained nearly 2 percent on September 28 following reports of a potential demerger of its businesses into multiple listed entities by Anil Agarwal's unit. This restructuring aims to alleviate the group's debt burden if successful.

Vedanta owns a 64.92 percent stake in Hindustan Zinc

According to a Bloomberg report, the company has informed its lenders about the restructuring and may announce the plans soon, with businesses like aluminum, oil and gas, and iron and steel being listed separately. This demerger could assist Vedanta's parent company, Vedanta Resources, in managing its debt, while Vedanta Resources will continue to serve as the holding company for the new units.

Also Read: Vedanta is preparing to de-merge sprawling operations

Vedanta Chairman Anil Agarwal mentioned last month the possibility of separately listing some or all its businesses, spanning metals, mining, and oil and gas.

Vedanta shares plunged to a one-year low on September 27 after Moody's Investor Service downgraded the company's corporate family rating from Caa1 to Caa2. Over the past three months, Vedanta's stock fell 24 percent, while the benchmark Sensex gained 5 percent.

In a recent development on September 21, the Vedanta board approved raising Rs 2,500 crore through private placement of non-convertible debentures (NCDs), a routine refinancing activity.

Also Read: Vedanta head says mulling separately listing different businesses

Earlier, in March, Crisil downgraded Vedanta's outlook to negative due to concerns about increased financial leverage and reduced financial flexibility. India Ratings also revised its outlook to negative, citing a higher risk of refinancing at increased borrowing costs.