InvestorQ : Why is Vedanta again planning to go for delisting of shares from Indian buyers
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Why is Vedanta again planning to go for delisting of shares from Indian buyers

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4 weeks ago
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Vedanta Resources PLC, the holding company of Vedanta Ltd of India, has announced its intent to once again revive its India delisting plans. However, this time around it is offering a price of Rs.235 per share to shareholders as against the meagre Rs.87.50 offered during the previous delisting attempt in the month of May 2020. At that time the deal did not go through as LIC had objected to it. Let us quickly see what Vedanta learnt from the case.

In 2020, Vedanta made an attempt to buy back outstanding shares of its India unit at Rs.87.50 per share. However, large institutional investors like LIC were not convinced about the price and opted to stay out. LIC refused to participate in the delisting offer unless Rs.320 per share was offered. This time around, Vedanta Resources is planning to stretch itself all the way up to Rs.235 per share.

But is this time any different? Let us look at dispassionately. Last time, LIC had expressed a view that Vedanta was buying back at the bottom of the metals cycle, which was unfair. The institutional shareholders had argued that it would result in huge losses to shareholders who had held on to the stock through the cycles. Vedanta wanted to corner all dividends that would be paid out by cash rich group companies of Vedanta like Hindustan Zinc.

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