Want to exit Vedanta? Here’s what you have to think about
Deepak Shenoy, Founder, Capital Mind, says “technically, Vedanta is not a great play. If you bought it for fundamental reasons, then you probably want to wait to see how the demergers evolve into the results which should start coming in and more colour should start coming in once they announce results. So you might as well wait for that to make a decision. The reason to exit is probably related to why you entered in the first place.”
What do you make of this move coming in from Vedanta? Earlier it was all about merging and now it is all about demerging?
Yes, it is a little crazy.
Honestly, we do not own a stake in the company. This is a little confusing about why they have done this. There is a large amount of debt outstanding at the promoter group level.
So maybe this is a precursor into perhaps providing opportunities for sales in case they are not able to pay back their debt on time and to hang off the businesses in a way that they can sell them off as individual companies rather than as divisions and have different structures.
Personally, I do not like it because it is for the promoter's convenience, not for the company's. But we will now have to wait a whole cycle to see the annual reports in order to figure out how everything has demerged in terms of the balance sheet which is where a lot of the risks are.
