Synopsis:
Vedanta Ltd has acquired a debt ridden company, Jaiprakash Associates (JAL) by winning Rs. 17000 crore bid.
A leading mining company has gained attention by acquiring a debt-laden company with a Rs. 17,000 crore winning bid. This bold move not only strengthens its position in the mining sector but also underscores its ambitious growth and expansion strategy.
With the market capitalization of Rs. 1,70,512.47 crore, the shares of Vedanta Ltd is trading at Rs. 436.10, down by 2.11 percent from its previous day’s close price of Rs. 445.50 per equity share, and it has reached a low of Rs. 433.35 in the same trading day.
What’s the news?
Vedanta, the mining conglomerate, has outbid Gautam Adani’s Group to acquire the debt-laden Jaiprakash Associates (JAL) with a winning offer of Rs. 17,000 crore, according to PTI sources. The bid reflects JAL’s net present value of Rs. 12,505 crore. The company is currently undergoing insolvency proceedings due to loan defaults.
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Other Updates
Vedanta, led by Anil Agarwal, is restructuring its operations into five sector-focused entities: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel & Iron, and Vedanta Limited (which will continue to operate in the base metals sector).
Each existing shareholder will receive one share of the new company for every Vedanta share held. The move, which is part of Vedanta’s broader “3D” strategy (Demerger, Diversification, and Deleveraging), aims to streamline operations, increase shareholder value, and address the company’s $6 billion debt.
Despite strong shareholder and creditor support, the demerger faces regulatory challenges, such as government objections to disclosures, SEBI warnings on post-NOC scheme changes, and legal scrutiny from the NCLT and NCLAT. While NCLAT has granted temporary relief allowing restructuring to continue, these hurdles may affect the demerger’s timeline and execution.
About the Company
Vedanta Limited is an India-based natural resources company with operations across oil and gas, metals, power, and glass substrates. Its diverse portfolio includes aluminum, zinc, lead, silver, copper, iron ore, steel, and nickel, serving industries such as power, construction, transportation, packaging, renewables, automotive, and aerospace.
It also supplies crude oil to refineries and natural gas to fertilizer and city gas distribution sectors in India. It has presence across India, South Africa, Namibia, Ireland, Liberia & UAE.
A return on equity (ROE) of about 38.5 percent, the return on capital employed (ROCE) of about 25.3 percent and the debt-to-equity ratio of 2.22, demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 12.6x lower as compared to its industry P/E 46.4x.
In Q1FY26, the company reported revenue of Rs. 37,824 crore, up 5.8 percent year-on-year (YoY) from Rs. 35,764 crore in Q1FY25 but down 6.5 percent quarter-on-quarter (QoQ) from Rs. 40,455 crore in Q4FY25.
Profit came in at Rs. 4,457 crore, declining 12.5 percent YoY from Rs. 5,095 crore and 10.2 percent QoQ from Rs. 4,961 crore, indicating revenue growth YoY but pressure on profitability both sequentially and annually.
Written by Akshay Sanghavi
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