Vedanta shares up on ₹8,500 cr fundraising plan

Shares of Vedanta Ltd surged 1.5% in the early morning trade on Friday after the company announced fundraising of ₹8,500 crore. The scrip opened a gap up at ₹436.30 and hit a day's high at ₹439.75 on the BSE. At the current share price of ₹437.05, the scrip is trading 2.5% down compared to the 52-week high of ₹448.95 touched May 15, 2024. At today's share price, the company's m-cap stands at ₹1,62,645.94 crore.

The mining giant’s exchange filing says it plans to raise ₹8,500 crore via issuing equity shares or American or global depository receipts or foreign currency convertible bonds.

"The Board of Directors of Vedanta Limited has considered and approved raising of funds for an aggregate consideration of up to ₹ 8,500 crore," the company says via an exchange filing.

To give effect to the proposed issuance of securities, the Vedanta Board authorised its Committee of Directors to decide the structure, form of issuance, price, terms and conditions related to the fundraising plan.

The company also announced its first interim dividend of ₹ 11 per equity share on a face value of ₹1 per equity share for the Financial Year 2024-25 amounting to ₹4,089 crore. “As intimated May 13, 2024, the record date shall be Saturday, May 25, 2024, and the interim dividend shall be paid within the stipulated timelines.” So far, in the past 12 months, Vedanta had declared an equity dividend amounting to ₹29.50 per share, while it declared 41 dividends since July 23, 2001, as per Trendlyne data, a stock market platform.

Besides, Vedanta has also announced the formation of a continuous cast copper rod facility in Saudi Arabia. To explore new growth opportunities, Vedanta has set up Vedanta Copper International VCI Company Ltd. “Investment in Vedanta Copper International VCI Company Ltd for setting up of Continuous Cast Copper Rod Plant – in Kingdom of Saudi Arabia (“KSA”),” the company says.

It says VCI will set up a state-of-the-art copper rod manufacturing facility, with a projected capacity of 125 KTPA in Saudi Arabia, which will enable it to explore more growth opportunities in new geographies. “Post the investment, VCI shall become a direct wholly owned subsidiary of the Company.”

In the last year, the large-cap stock has risen nearly 56.40%, while it surged 82.48% in the past six months, and 69.96% on year-to-date (YTD). The counter added nearly 12.50% in the past month.

Among brokerages, Motilal Oswal in its report on April 25 reiterated its "neutral rating" on VEDL, with a revised SoTP-based target price of Rs 360. It marginally increased EBITDA estimates by 4% in FY26 to incorporate the improving outlook.

Centrum in its April 26 report upgraded the stock to “BUY”, with the target price of ₹438, based on FY26 some of the parts (SoTP).