Vedanta buyback offer gets cold shoulder from shareholders

Vedanta’s renewed buyback offer got only 58 per cent of investor bids, as per stock exchange data. This was the second attempt in less than six months by Vedanta and its promoters to induce public shareholders to part with their shares in the company. In the offer that closed on Wednesday, Vedanta was seeking 65.10 crore shares in the buyback offer from the public but got only around 37.42 crore shares.

However, this was not a de-lising offer and only an offer to buy back shares.

This time Vedanta was seeking to buy back 17.5 per cent stake from the public against an earlier offer of over 40 per cent, which constituted the entire non-promoter holding. In October last year, Vedanta’s delisting offer had failed as LIC quoted a price of ₹320 per share to tender their shares against the offer price of ₹79.

LIC is the largest non-promoter shareholder in Vedanta. This time around, Vedanta sweetened the open offer price to ₹235 per share, but was to buy only a fraction of public shares, which too it could not get. Last time, around 12 crore bogus tender of shares were detected by stock exchanges in the delisting offer. Later, the company had blamed it on a technical snag in the offer process.

Analysts bullish

Analysts say that markets believe that the global metals and mining sector is getting re-rated and hence they see improving prospects for Vedanta. They believe that shareholders will not tender their shares in the near future.

Vedanta shares have surged 47 per cent this year, driven by higher commodity prices and better demand prospects globally. The share price of the company rose 1.4 per cent on Wednesday to close at ₹236.85.