03-Aug-2023
2 mins read
Vedanta, the Metal conglomerate shares plummeted by 8.96 per cent, reaching a day low of Rs 247.80 compared to its previous closing price of Rs 272.20. on Thursday after their promoter Twin Star Holding sold their 4.3% stake via a block deal at a 5% discount on market prices wherein around 16.5 crore equity shares of the company worth Rs 4,270 crore changed hands.
The promoter sold 16.5 crore equity shares, reducing their stake from 46.4% to 42.1%.
Twin Star Holding has sold its stalk second time in a year. Earlier, they sold a 3.5% stake in the company.
This comes out after a record dividend of Rs 101.50 per share in FY23. Vedanta paid Rs 18.50 in May this year. This dividend comes out when Vedanta’s UK-listed parent, Vedanta Resouces, has near term debt obligation of $1 billion, including bonds due in Aug and Jan 24.
According to banking sources, the recent share sale in the Indian-listed subsidiary will aid the promoter entity in repaying the debt due in the upcoming months.
The group promoters actively engaged in fundraising and collect $1.3 billion through different sources. They obtain an $850-million loan from JPMorgan, a $250-million loan from Oaktree Capital, a $200-million loan from Glencore, and an additional $ 200 million loan from commodity trader Trafigura. The promoters also raised funds by getting higher royalty payments from its Indian subsidiary.
Vedanta’s CFO, Sonal Shrivastava, said they aim to reduce debt as its high-quality assets generate a healthy cash flow. Its net debt as of July 24 was $7.2 billion with an average interest rate of 8.7 per cent.
Vedanta’s debt has decreased by $3 billion since it announced its intention to accelerate deleveraging and reduce it by $4 billion within three years in February 2022. “Vedanta has thereby achieved 75% of its committed reduction in just 14 months,” the mining major said.