Final day for Vedanta shareholders; stock up by 5 per cent

Today i.e. Friday, October 9, 2020, is the final day for Vedanta shareholders to tender their shares for the reverse book building process for delisting that opened on October 5 and will conclude today.

It is a key event that is being closely watched by the market participants as the process of delisting of any company is considered to be significant for both, the promoters as well as minor shareholders.

As of now, around 74 crore shares of the company have been tendered by the general public shareholders. Hence, the company needs 60 crore more shares to be tendered. A total of 134 crore shares out of 169.73 crore shares, which are held by the public shareholders, must be tendered for so that the delisting can be successful.

Generally, the final exit offer price is decided on the basis of bids placed by the public shareholders and if the price is not acceptable to the promoters, then they can make a counteroffer at any price that will be above the book value. For Vedanta, if required, the promoters will make a counteroffer on October 13. Meanwhile, on October 16, the success or failure of the delisting will be known and if successful, then the promoters will have 10 days to pay to minority shareholders, who subscribed to the offer while other shareholders will get up to a period of one year to tender their shares at the exit price.

According to market analysts, the share tendering so far has been tepid because even as the company is expected to witness good growth prospects in the near future, the offer price is well below the fair price. The floor price is set at Rs 87.25 for share tendering while post the announcement made in May 2020, the stock has gained by more than 50 per cent thereby, indicating a huge potential growth in business with an improving economic environment.

The stock is down by around 21.3 per cent on a YTD basis but has nearly doubled from its March lows. In the last one month, the stock gained by more than 7 per cent before witnessing a sharp crash by around 14.5 per cent in the previous two trading sessions.

On Friday, the stock was trading at Rs 123.15, up by 4.72 per cent or Rs 5.55 per share. The 52-week high is Rs 166.05 and the 52-week low is Rs 60.30 on BSE.