August 3, 2023
In a move aimed at restructuring its business and embracing green energy, Vedanta’s promoter entity, Twin Star Holdings Ltd, is set to sell a significant stake in the Indian mining company. Twin Star Holdings is reportedly planning to sell up to 16 crore shares, accounting for a 4.3% stake in Vedanta, for a substantial sum of ₹4,136 crore.
The block deal on the exchanges saw approximately 16.5 crore equity shares of Vedanta changing hands, amounting to ₹4,270 crore. Following this development, Vedanta’s share price sharply declined nearly 9% on Thursday. At one point, the shares were trading as low as ₹247.80 apiece on the Bombay Stock Exchange (BSE), inching close to its 52-week low of ₹245.85 apiece, recorded on August 04, 2022.
The stake sale by Twin Star Holdings forms part of the visionary plan of billionaire Anil Agarwal, founder of the Vedanta group, to reduce the company’s debts and realign its business focus towards green energy and non-ferrous sectors. The move is seen as an effort to capitalize on the emerging opportunities in the renewable energy space, in line with the global push for sustainable and eco-friendly practices.
According to the details reported by Livemint, Twin Star Holdings is expected to sell 160 million shares in Vedanta to institutional investors at a minimum price of ₹258.50 each. This offering represents a 5% discount to the closing price of ₹272.15 on the National Stock Exchange of India Ltd, as per the terms of the deal brokered by JP Morgan India Pvt. Ltd.
As of Wednesday, Twin Star Holdings holds a substantial stake of 1.72 billion shares, equivalent to 46.4% of Vedanta’s total shares, valued at an estimated ₹1.01 trillion. The proposed stake sale will significantly reduce Twin Star Holdings’ stake in Vedanta while enabling the company to raise substantial capital for its transition towards sustainable business practices.
Industry insiders reveal that there is a 180-day lock-up period on the seller, Twin Star Holdings, which means the promoter entity will not be able to further offload its Vedanta shares for at least six months after the initial sale. This measure is often taken to provide stability to the stock’s value and avoid sudden fluctuations due to large-scale divestment.
The share price of Vedanta has been under pressure throughout this year, witnessing an overall decline of 18% so far. Over the past month, the stock has plummeted by 9%, adding to the challenges faced by the company.
At the time of writing, Vedanta’s share price was trading 6.89% lower at ₹253.45 apiece on the BSE. The market response to the stake sale and the company’s transformation plan remains under close watch, as investors anticipate the potential impact on Vedanta’s future growth prospects.
The announcement of Twin Star Holdings’ stake sale marks a significant moment in Vedanta’s journey towards sustainability and aligning with global ESG (Environmental, Social, and Governance) standards. As the company adapts to new market dynamics and emerging opportunities in the green energy sector, stakeholders are eager to witness the unfolding of Vedanta’s transformational chapter under the visionary leadership of Anil Agarwal.
