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by Financegossips
In the past five sessions, Vedanta's stock price has declined over 12 per cent, while it has fallen nearly 20 per cent in a month.
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Vedanta shares fell after the government's decision of not letting Vedanta Resources Limited’s bid to sell international zinc assets to Hindustan Zinc.
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The decline in Vedanta’s share price comes weeks before its scheduled $2-billion fundraising drive.
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This has also affected the prices of Vedanta Resources’ dollar bonds. The bond yield has depreciated more than 30 per cent, putting Vedanta bonds in the junk category.
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Decrease in bond yield has put the company in a precarious position and it could face a debt repayment crisis due to the fall in its bond yield in the global markets.
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The Centre was upset with Vedanta's proposal as the move could hinder its plan to dispose of its 29.54 per cent residual stake in Hindustan Zinc.
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If Vedanta is unable to advance either the $2 billion fundraising exercise or the sale of its international zinc assets to Hindustan Zinc Ltd in the near future, the company’s credit rating will be negatively impacted.
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Another worry for the company stems from the amount of pledged shares. It is worth noting that 99.99 per cent of the promoter holding was pledged as of December 31, 2022.
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