Mining mogul Anil Agarwal is considering voluntary delisting Vedanta from the Indian stock market. He will offer Rs. 87.5 to the 49.46 percent public shareholders of Vedanta. Promoter group Vedanta Resources Ltd holds 50.14 percent of the subsidiary company, Vedanta. It is not the first time Vedanta is delisting its stock from the stock market. They have previously delisted their share from the London Stock exchange in 2018.
Vedanta LSE Delisting
In an interview given to India Today in 2018, Anil mentioned - "The London listing has served us extremely well since that time. However, given the subsequent growth of our underlying businesses and the maturity of the Indian capital markets, together with related feedback from our shareholders and other stakeholders, we have concluded that a separate London listing is no longer necessary to achieve the Vedanta Group's strategic objectives."
In the same year, thirteen unarmed protesters were killed in the police firing, demanding to close Vedanta's copper smelter in Tamilnadu because it is polluting the environment. UK's Labor party had called for Vedanta's delisting following the death of the protestors. Though, Anil had denied it as the reason behind delisting the company.
Reasons for delisting Vedanta resources
"Due to the impact of COVID 19 pandemic, we have accelerated the strategy in this challenging environment to ensure support for meaningful deleveraging and to enable us to continue to invest in the growth of the business," - Anil Agarwal said.
But, there are a few other reasons too:
Delisting regulations in India
- The first step is to appoint a merchant banker by the company.
- Next, the merchant banker will perform the "reverse book building" process in which the merchant banker will take the bids from the public shareholders for the offer price.
- Then, the company will decide the final offer price to the public shareholders.
- Finally, the company's objective is to buy 90% of the company's stocks to delist itself from the stock market. This process can take years to complete.
Share Price of Vedanta
Vedanta is currently trading at Rs. 92.60 and which is 3.87% gain in the last one day. There is a direct correlation between the search results of the Vedanta share price, and its actual price since the delisting news is out. It means that people are more inclined to buy stocks to get a higher offer price from the promoter.