InvestorQ : Why is Vedanta delisting its shares in India now?
Mary Joseph made post

Why is Vedanta delisting its shares in India now?

sara Kunju answered.
8 months ago

Vedanta announced plans to delist the stock from Indian stock exchanges by offering a price of Rs.87.50. The question is why is Vedanta planning a delisting at this point of time? The Vedanta promoters had earlier got their UK based holding company, Vedanta Resources PLC, delisted from London Stock Exchange in 2018 as part of the simplification of group structure. When a business is listed in multiple exchanges, for the commodity business that is volatile, it becomes a liability. Apart from stringent listing regulations, market fluctuations create unnecessary strain on valuations. However, the business logic of the delisting decision by Vedanta is hard to miss. Global commodity prices have corrected sharply post-COVID and that has made Vedanta exceedingly cheap. Delisting the stock and buying out the minority shareholder gives a sense of assurance to the market that the promoters are going the whole hog. Commodity cycle may be ripe for a recovery if post-COVID stimulus bears fruit. That would Anil Agarwal control over the business at a very low cost. Vedanta also sits on cash of Rs.35,000 crore.