At what price should you tender Vedanta shares

Mumbai: Analysts have recommended the minority shareholders of Vedanta to tender their shares between Rs 170 and Rs 200 as against the floor price of Rs 87.50. The reverse book building (RBB) process which started on Monday would close on Friday. Thursday is the last day for upward revision or withdrawal of bids.Domestic brokerage Emkay Global sees the fair value of Rs 170 per share for delisting. “We note that given the high leverage at the Vedanta Plc, minority shareholders should seek a price which is at least equivalent to the nominal book value without considering the write-offs,” said Vishal Chandak, analyst, Emkay Global. “Assuming a reversal of write-off due to the recovery in oil prices and adding back Rs 42.76 per share, the revised book value should return to its original Rs 189.63 per share.”The company has reduced the book value from Rs 189.63 per share to Rs 146.87 per share citing long-term concerns over oil prices after Covid-19 and further reduced to Rs 89.38 per share as per the calculations of the Companies Act. However, the company did not reverse the write-offs despite crude prices doubling in the last five months.“The floor price determined is at a steep discount to the current market price and as it is through reverse book building, investors should bid the shares at 20-25 per cent higher from the current price as it will be difficult to achieve at the desired offered price mentioned,” said Vikas Jain, analyst, Reliance Securities. “From the initial announcement of delisting in May the stock has moved up by 50 per cent which indicates there is a lot of value for the business,” he added.Shares of Vedanta closed flat at Rs 137.80 on Monday.Corporate governance firm Stakeholders Empowerment Services (SES) recommends that shareholders must offer their shares keeping the range Rs 236-Rs 310 in mind as each Vedanta share has 0.74 HZL share embedded, which itself is valued at Rs 145.

from Economic Times https://ift.tt/2SBxPsN