Vedanta clarified that the news regarding NCLT deferring the demerger hearing is incorrect.
Shares of Vedanta fell as much as 2.75% on Wednesday on reports of fresh hurdles to its proposed demerger plan.
CNBC TV-18 had reported that the National Company Law Tribunal (NCLT) deferred its hearing on the demerger to September 17 after the central government raised “serious objections.”
The government alleged that Vedanta’s scheme involved the concealment of key details, overstated revenues, and hidden liabilities, which could potentially affect the recovery of dues.
However, Vedanta clarified that the news about the demerger being stalled is incorrect. The petition was heard by the NCLT today, with the next meeting scheduled for September 17.
At the same time, the Securities and Exchange Board of India (SEBI) flagged concerns, saying Vedanta modified its demerger plan after receiving a No-Objection Certificate (NoC) from both SEBI and the stock exchanges. The markets regulator called this a “serious breach” of its master circular and issued an administrative warning to the company.
More Legal Hurdles
Adding to its challenges, Vedanta also faced a setback in the Supreme Court (SC) regarding its Punjab-based Talwandi Sabo Power project.
The company had sought additional compensation after the withdrawal of ‘deemed export’ benefits, but the apex court dismissed the plea. The SC upheld the Appellate Tribunal for Electricity’s ruling, stating Talwandi Sabo was never legitimately entitled to such benefits.
This ruling effectively rules out any additional financial relief from the project. It also comes after the NCLT had previously rejected Vedanta’s proposed demerger of Talwandi Sabo Power.
Technical Outlook
Analyst Prabhat Mittal noted that on the medium-term chart, Vedanta stock took multiple resistances around 475. While on its short-term chart, it took support at 425.
He advised traders who are trapped on either side to keep strict stop losses. He sees ₹425 as a good level for buying and ₹475 as a good level for profit booking.
A breakdown below ₹425 could open the path to ₹375, while a breakout above ₹475 will take the stock to the next target of ₹525.
What Is The Retail Mood?
Retail sentiment on Stocktwits changed to ‘neutral’ from ‘bullish’.
Year-to-date, the stock has largely remained unchanged.
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