InvestorQ : Why did the stock of Vedanta fall so sharply on Wednesday in the market?
Riya Dwivedi made post

Why did the stock of Vedanta fall so sharply on Wednesday in the market?

Answer
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shrinidhi Rajan answered.
3 weeks ago


Vedanta fell sharply by nearly 15% to Rs.117 on Wednesday, in its worst single day fall since March 23 this year. This sharp fall in the price came on the back of a 6-fold jump in volumes indicating that savvier investors were exiting the stock and not waiting for the buyback.

Under the SEBI regulations for delisting, Vedanta Resources of UK will offer to buy out the balance 49.5% stake in Vedanta India and take the company private. However, the indicative price was set at Rs.87.50 at that point of time.

In any delisting proposal, the promoter must be able to wrap up 90% of the share capital. So Vedanta Resources will have to acquire at least 39.86% or 148 crore shares from public shareholders. The actual delisting price is yet to be discovered.

With markets not pegging the value of Vedanta above Rs.130/share, there has been a heavy institutional rush and also HNI rush to exit the stock after the sharp rally in the last few months. The last date for counter-offer is Oct 13 while last date for price discovery is Oct 16.