Vedanta Power Sees Wild Swings on Debut as Other Demerged Units Freeze Up on Listing

Mumbai, June 15: Vedanta Power share price witnessed sharp volatility on their stock market debut on Monday, swinging from gains of as much as 5% to losses of nearly 4% as investors weighed the prospects of the newly demerged company and booked profits after the much-awaited listing. 

The stock listed at ₹41.8 per share following Vedanta Group’s mega demerger exercise, which saw four businesses—Vedanta Aluminium, Vedanta Power, Vedanta Oil & Gas and Vedanta Iron & Steel—begin trading as independent entities. Initial optimism pushed Vedanta Power higher in early trade, but the gains proved short-lived as selling pressure emerged later in the session. As of writing Vedanta Power was down 2.6% at Rs 40.7. 

Market Discovers Standalone Value 

Analysts attributed the sharp intraday swings to the market’s ongoing efforts to determine the standalone valuation of the power business, which was previously housed within Vedanta Ltd. 

Vedanta Power stock swung wildly on debut as investors struggle to arrive at a fair valuation on the company’s debut day. Source: NSE 

Unlike established listed companies with a long trading history, newly demerged entities often witness significant volatility in the initial days as investors reassess business fundamentals, growth prospects and sector-specific opportunities. The listing also provides shareholders their first opportunity to independently value the power business rather than as part of the larger Vedanta conglomerate. 

The stock’s movement mirrored broader volatility across Vedanta’s newly listed companies. Earlier in the day, Vedanta Aluminium Metal and Vedanta Oil & Gas also came under pressure, with both stocks hitting their respective 5% lower circuits amid profit-booking. Vedanta Iron and Steel also froze up, hitting the upper circuit. 

Part of Vedanta’s Value-Unlocking Exercise 

The debut marks a key milestone in Vedanta Group’s long-running restructuring plan aimed at simplifying its corporate structure and unlocking value for shareholders. 

Under the demerger scheme, existing Vedanta shareholders received one share in each of the newly created companies for every Vedanta share held. The move is expected to create sector-focused businesses with greater operational flexibility and the ability to attract investors specifically interested in individual industries such as metals, power, oil and gas, and steel. 

Market participants have long argued that Vedanta’s conglomerate structure resulted in a holding company discount, with the value of individual businesses not fully reflected in the parent company’s market capitalisation. The demerger seeks to address that issue by allowing each unit to be valued independently. 

Volatility May Persist 

Analysts expect volatility to remain elevated in the near term as institutional and retail investors establish positions and the market arrives at fair valuations. 

While the sharp reversal in Vedanta Power’s debut session highlights investor caution, market experts believe trading patterns over the next few weeks will provide a clearer indication of how investors view the company’s standalone growth prospects and earnings potential within India’s expanding power sector. 

Source

• https://www.nseindia.com/get-quote/equity/VEDPOWER/Vedanta-Power-Limited