Shares of Vedanta rose more than 4 percent after JPMorgan said that the metal company remains best positioned to take advantage of higher LME Zinc prices.

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At 12:15 IST, shares of Vedanta were trading 3.2 percent higher at Rs 228.4 on the BSE.

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The stock price reflects LME Zinc at $2,500 per tonne, Aluminium at $2,300 per tonne, and Brent crude oil at $80 per barrel, according to the foreign brokerage firm.

As per JPMorgan, zinc inventories have declined to multi-decade lows.

Some analysts at domestic brokerage firms said that the inventory levels falling to a multi-decade low hint at a weak demand scenario.

Further, when restocking happens and inventory levels rise, they see Vedanta benefitting from the expected rise in demand, which could also push zinc prices higher.

The brokerage firm has an ‘overweight’ call on the stock with a target price of Rs 490.

Another development that might have driven the stock price higher was that Vedanta was reportedly preparing its biggest ever rupee bond sale and is seeking commitments for as much as Rs 4,809 crore of 10-year notes. As per a report, Vedanta will use the proceeds to prepay or repay debt for capital spending.

Vedanta is India’s largest and the world’s second-largest zinc-lead miner. The metal miner’s fully integrated zinc operations currently hold 78 percent market share in India’s primary zinc industry.

The company’s zinc operations comprise mining and smelting assets of Hindustan Zinc Ltd in India and Zinc International in Namibia, South Africa, and Ireland.

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