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VEDL - Vedanta News Story

₹130.95 -3.4  -2.5%

Last Trade - 18/09/20

Sector
Basic Materials
Size
Large Cap
Market Cap £5.08bn
Enterprise Value £9.00bn
Revenue £8.85bn
Position in Universe 64th / 3004

UPDATE 1-India's Vedanta sinks 20 pct to 2-1/2-year low

Fri 1st February, 2019 8:03am
(Adds analyst comments, stock milestones)
    By Chandini Monnappa
    Feb 1 (Reuters) - Shares of India's Vedanta Ltd  VDAN.NS 
slumped to a two-and-a- half-year low on Friday after analysts
expressed concerns over an investment by the parent company of
the conglomerate in African miner Anglo American  AAL.L .
    Vedanta said https://bit.ly/2TpGNrV on Thursday its foreign
unit Cairn India Holdings Ltd had paid $200 million to buy a
stake in Anglo American from Volcan Investments Ltd, the miner's
parent company, as a part of its "cash management activities".
    The miner's returns from the deal depends on Anglo
American's stock price and returns are not guaranteed, Morgan
Stanley said in a note.
    "While there is some downside protection for Vedanta in
specific scenarios (not clarified by the management), returns
are not guaranteed," Morgan Stanley said.
    The stock slumped as much as 19.86 percent on Friday, the
largest intraday fall since October 2008. More than 74 million
shares - 7.4 times its 30-day average - had changed hands by
early afternoon, making it the most-heavily traded security on
the NSE index  .NSEI .
    Industry players too have speculated that Agarwal, who
controls about a fifth of Anglo American, wants some form of a
tie-up with the global miner.
    In September last year, Vedanta Resources' Chairman Anil
Agarwal's decision to take the London-listed miner private was
seen by some as a prelude to a potentially broader deal with
bigger miner Anglo American. urn:newsml:reuters.com:*:nL3N1VP2NZ
    Kotak's analysts in a note said that while Vedanta stated
the investment is to earn higher returns, they fail to see merit
in the arrangement.
    Industrial metals prices are set for their biggest annual
fall in years after signs of slowing growth in China's
commodities-hungry economy and a U.S.-China trade war,
potentially affecting global mining firms.
    Vedanta on Thursday posted a 21.1 percent decline in
third-quarter profit that still beat estimates. urn:newsml:reuters.com:*:nL3N1Z834W

 (Reporting by Chandini Monnappa in Bengaluru; Editing by
Sudarshan Varadhan and Shreejay Sinha)
 ((chandini.m@thomsonreuters.com; +91-82-6749-7919; Reuters
Messaging: chandini.m.thomsonreuters.com@reuters.net))
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