Vedanta demerger: Why newly listed Vedanta stocks are hitting upper and lower circuits after listing

Shares of newly demerged Vedanta Group companies traded on a mixed note on Tuesday, a day after their stock market debut, as investors assessed the prospects of the four standalone businesses created under the group's long-awaited restructuring plan.

While two of the newly listed entities remained under selling pressure, another attracted strong buying interest, highlighting divergent investor sentiment towards the businesses carved out from the Vedanta stable.

At around 10:52 a.m., shares of Vedanta Aluminium and Vedanta Oil & Gas were locked in the 5 per cent lower circuit at Rs 471.11 and Rs 34.30, respectively. Both stocks remained frozen at their lower circuit limits for the second consecutive trading session following Monday's listing.

In contrast, Vedanta Iron & Steel was locked in the 5 per cent upper circuit at Rs 22.11. The stock had touched a low of Rs 19.06 on its listing day before witnessing a sharp turnaround in investor interest.

Four businesses begin independent market journey

Monday marked a significant milestone for the Vedanta Group as four demerged entities — Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Iron & Steel and Vedanta Power — commenced trading on the BSE and NSE.

The listings are part of the group's broader restructuring exercise announced in September 2023. The plan aims to split Vedanta's diversified operations into separate listed entities, allowing investors to gain direct exposure to individual businesses rather than the conglomerate structure.

Group chairman Anil Agarwal has described the demerger as a step towards simplifying the corporate structure, unlocking value and attracting focused investments into each business.

Trade-to-trade restrictions in place

All four newly listed companies are currently trading under the trade-to-trade category.

According to exchange guidelines, the stocks have been placed in the BSE's T Group and the NSE's BE segment for the first 10 trading sessions. During this period, intraday trading is not permitted and all transactions must result in delivery.

Market participants said such restrictions are common for newly listed securities and are intended to reduce excessive volatility during the initial trading phase.

Heavy volumes in Iron & Steel

Investor activity remained elevated across the newly listed counters.

A combined 76.37 million shares changed hands across exchanges, while pending buy orders of nearly 28.93 million shares were reported in the system, largely driven by demand for Vedanta Iron & Steel.

The contrasting movement in the stocks suggests investors are taking a differentiated view on the earnings outlook and growth potential of each business rather than treating them as a single group entity.

Vedanta slips despite broader market strength

Meanwhile, flagship company Vedanta traded lower despite gains in the broader market.

The stock fell around 1 per cent to Rs 299.55 after touching an intraday low of Rs 297.60. The decline came even as the Nifty 50 index advanced about 0.5 per cent during the session.

Vedanta shares have recovered from their 52-week low of Rs 268.70 touched on April 30, but investor attention has increasingly shifted towards the newly listed businesses following the demerger.