Vedanta Demerger: What could be the listing price of the 4 new companies? Check acquisition cost details here

Vedanta Demerger: Shares of Vedanta Limited gained over 2 per cent on Tuesday as investors continued to evaluate the company’s post-demerger structure and awaited the listing of its four newly separated businesses.

The stock was trading at Rs 334.05 on the National Stock Exchange of India at 1:08 pm IST, up 2.16 per cent for the day. Vedanta shares have now risen nearly 15 per cent since adjusting for the demerger on April 30.

In a regulatory filing released over the weekend, the company disclosed the cost of acquisition ratio applicable to shareholders following the demerger, a key detail for tax calculation purposes.

Vedanta to account for majority Of acquisition cost

According to the filing, Vedanta Limited shares will account for 52.34 per cent of the total acquisition cost for existing shareholders.

The remaining cost will be apportioned among the four demerged entities:

Malco Energy: 21.49 per cent
Talwandi Sabo Power: 12.23 per cent
Vedanta Aluminium Metal: 7.15 per cent
Vedanta Iron and Steel: 6.79 per cent

The company said the allocation is intended to help investors calculate capital gains and applicable taxes when the shares of the demerged entities are sold after listing.

How the allocation works for investors

For example, if an investor had purchased Vedanta shares worth Rs 10,000 before the demerger, the revised allocation of acquisition cost would now be split across the parent company and the four new businesses.

Under the revised structure:

Rs 5,234 would be attributed to Vedanta
Rs 2,149 to Malco Energy
Rs 1,223 to Talwandi Sabo Power
Rs 715 to Vedanta Aluminium Metal
Rs 679 to Vedanta Iron and Steel

The total acquisition cost remains unchanged at Rs 10,000.

Vedanta clarified that these ratios do not indicate the future listing prices of the demerged companies.

Brokerages estimate valuations for new entities

Brokerage Nuvama Wealth Management has assigned indicative valuations to the newly separated businesses.

According to the brokerage:

Vedanta’s zinc and copper business could be valued at Rs 336 per share
Vedanta Aluminium Metal at Rs 477 per share
Vedanta Oil and Gas at Rs 47 per share
Vedanta Power at Rs 47 per share
Vedanta Iron and Steel at Rs 30 per share
Investors Await Listing Of Demerged Companies

The demerger is being seen as one of the largest restructuring exercises in India’s metals and mining sector.

Vedanta Limited had earlier announced that shareholders would receive one share each of the four demerged entities for every share held in the parent company.

The company had fixed May 1 as the record date for the demerger. Since markets were closed on Maharashtra Day, the stock adjusted to the demerger on April 30, appearing to decline sharply due to the separation of business value.

While shareholders can continue trading Vedanta shares, the value attributable to the four demerged entities remains undiscovered until their separate listings on the BSE Limited and NSE. The listing dates are yet to be announced.