On March 16 the price of the open share raised to Rs. 235 for buying the shares of Vedanta Ltd. Earlier in January they proposed the offer to investors to buy up to 10% at Rs 160 in Vedanta.
The valuation of the Indian equity market and hike US bond yields indicates less risk of loss in the investment. Therefore, for investors, it is a potential source of gaining returns in the future.
The offer starts on March 23, 2021, and is open till April 7, 2021. Earlier in October 2020, Vedanta made a decision to remove the stock from the stock exchange i.e. delist the entity.
However, it failed to collect the limit amount for the delisting process. It was able to assemble shares Rs 125 Crore shares instead of Rs 137 Crore. This disparity was probably due to the uncertainty of shares by foreign shareholders. The offer price at the time of delisting was Rs 87.5 per share.
It might be difficult for the company to collect the limit amount of the remaining 17.5 % of equity shares. Though, LIC is the prominent institution in the tendering process to make the buyback successful.
It’s a good opportunity for short-term investors to tender the share as the offer price is of a high premium. However, long-term investors should consider various other factors before making any decision.
Vedanta Limited is an Indian mining company that started its operation in 1979. It is a producer of Oil & Gas, Zinc, Lead, Silver, Copper, Iron Ore, etc. Its parent organization is Vedanta Resources.
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