Vedanta Shares Surge on Growth Roadmap, Biggest Monthly Gain in 10 Years

New Delhi, Apr 18 (PTI) Shares of Vedanta hit a 52-week high level on Thursday, buoyed by encouraging growth outlook offered by Chairman Anil Agarwal, who expects FY25 to be a "transformative" year for the mining conglomerate.

The stock ended 3.4 per cent higher on the NSE at Rs 390.95. It climbed to a one-year peak of Rs 394.75, reflecting a jump of 4.37 per cent, in the intra-day trade.

At the BSE, it climbed 2.88 per cent to settle at Rs 388.90. The stock hit its 52-week high of Rs 394.70 during the day, rallying 4.41 per cent.

Vedanta shares have rallied a whopping 45 per cent so far this month, marking their best-ever monthly gains in a decade, driven by the company's focus on deleveraging its balance sheet, while continuing its capital investments to expand capacity.

Benefits from the commodity upcycle has also aided rally in the stock.

The group aims at achieving an annual EBITDA of USD 7.5 billion within two years, while parent Vedanta Resources is targeting to reduce its debt by USD 3 billion in the next three years.

"FY25 will be a transformative year for us on many fronts as we prioritize disciplined growth, operational excellence, and exploring opportunities along the value chain," Agarwal has said in a note to shareholders.

Vedanta is looking at raising about Rs 4,000 crore from Power Finance Corporation in order to boost power capacity as it aims to expand its energy portfolio in India amid rising competition from large domestic rivals.

The recent rally in Vedanta shares price on the back of demerger plans, deleveraging and soaring metal prices has led to a bullish call by domestic and international funds.

Strong buying by domestic and foreign institutional investors have also fuelled rally in Vedanta stock.

The world's largest asset manager, BlackRock, as well as Abu Dhabi Investment Authority (ADIA) along with domestic mutual funds like ICICI Mutual Fund, Nippon India Mutual Fund and Mirae India Mutual Fund have increased their holdings in Vedanta during the last four months.

Besides the deleveraging plan, the Street's eye is on the proposed demerger of Vedanta's business into six separate listed entities, which is expected to be completed by the end of 2024.

In September last year, Vedanta announced demerging metals, power, aluminium, and oil and gas businesses into separate entities to unlock potential value.

Agarwal sees the demerger helping each company to leverage on its strengths and attract targeted investments, thereby driving sustainable growth and long-term stakeholder value creation.

After the exercise, six independent verticals -- Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Limited -- will be created.