Shares of Vedanta Ltd., the Anil Agarwal-led mining conglomerate ended with gains of nearly 7 percent on Friday. This was the biggest single-day gain for the stock in 2023.

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With Friday's move, Vedanta also snapped a seven-day losing streak, during which, it fell to the lowest level in 31 months.

Vedanta's gains on Friday came on volumes that were triple of their 20-day average.

The surge came after its subsidiary Hindustan Zinc announced that it has authorised the committee of directors to evaluate appropriate corporate restructuring exercise to unlock shareholder value. You can read that detailed story here.

Vedanta Ltd. holds a 64.92 percent stake in Hindustan Zinc, most of which is pledged.

But despite the gains, the stock ended 20 percent lower for the quarter and 4 percent lower for September. The stock has also declined for five months in a row. The last time this happened was back in 2015.

Shares of the Anil Agarwal-led mining conglomerate fell to a 31-month low earlier this week following Moody's Investors Service's downgrade of some of the bonds issued by its parent company Vedanta Resources Ltd. and its wholly-owned subsidiaries.

The downgrade came over elevated risks of debt restructuring over the next few months.Earlier in the day, Bloomberg had reported that the parent company is planing to restructure payments on dollar bonds that are due in the next two years in recent meetings with international investors. The report also stated that the company plans to pay back a portion of those bonds maturing in 2024 and 2025 in cash, with the remaining principal deferred for three years.

Reports on Thursday also suggested the Vedanta is nearing a deal to demerge businesses into several listed entities. As per the report, the broad restructuring, if successful, may help Agarwal manage his group's debt load.

Vedanta's shares are also rising in-line with the surge seen in other metal names owing to a decline in the US Dollar index on Friday.

Vedanta's parent company faces repayment of notes worth nearly $2 billion in the financial year 2025. Including these bonds, the company is facing debt repayment worth $3.6 billion in the next financial year, according to Kotak Institutional Equities.

“The stock has not been very consistent. So, not for the fainthearted and it is best to take tactical play there, not something very long-term. If you have it and you are not getting value, you will have to definitely wait for a simple reason that if there is a possibility of improvement, it is on the way up because they will want to do things which create value so that the parent company, Vedanta Resources, has to get bailed out. So that will not happen if this business suffers. So, I am sure there is some linearity to improvement that can happen, and people would start seeing some value getting created in the near-term as well," Prakash Diwan, market expert said.

Shares of Vedanta ended 7 percent lower at Rs 222.7.

First Published:Sept 29, 2023 3:32 PM IST