Vedanta Share Price Plummets Amid Acquisition Roadblock and Bond Yield Depreciation

 

The share price of Vedanta has been continuously falling for the last four days, with today's opening price being lower than the previous day's. On NSE, the share price hit an intraday low of ₹261.95, recording a dip of around 13.50% during this period. According to market experts, negative sentiment surrounding Vedanta's acquisition of state-owned Hindustan Zinc and the sharp rise in the US dollar leading to the depreciation of Vedanta bond yield to 'junk' levels have put Vedanta shares under selling pressure. Experts suggest that Vedanta's stock may continue to decline since the metal stock has given a breakdown at ₹280, it has support placed at ₹240 to ₹230 zones.

 

Saurabh Jain, Vice President - Of research at SMC Global Securities, cited the fundamental reasons that led to the sharp selling of Vedanta shares, stating that the market mood was already negative regarding Vedanta after the Government of India (GoI) opposed the Vedanta offer to acquire government stake in Hindustan Zinc Ltd for $2.98 billion. Jain added that the company is facing a repayment crisis due to the fall in Vedanta bond yield in global markets. He said that Vedanta Ltd has to pay $1.2 billion due by H2FY23, $4.1 billion due by FY24, $3.9 billion due by FY25, and $4.7 billion due by FY26.

 

Anuj Gupta, Vice President - of Research at IIFL Securities, explained why the Vedanta bond yield had gone down, stating that due to a steep rise in the US dollar rate in the forex market, the Vedanta bond yield has gone down. On the chart pattern, Vedanta shares have given a breakdown at ₹280 levels, and it may continue to remain under sell-off heat for a few more sessions as the US dollar is expected to remain strong in the near term. As a result, Gupta predicts that the Vedanta share price may come down to the tune of ₹240 to ₹230 apiece zone. Thus, he advised those who have Vedanta shares in their stock portfolio to maintain a stop loss below ₹230, while fresh investors are advised to look at other metal stocks like Tata Steel or JSW Steel.