M-Cap of Vedanta's split cos jumps 67% to Rs 3.5 lakh crore
ET Intelligence Group: Vedanta's demerger has resulted in a significant value unlocking for shareholders. On its listing debut, the combined market capitalisation of the parent
ET Intelligence Group: Vedanta's demerger has resulted in a significant value unlocking for shareholders. On its listing debut, the combined market capitalisation of the parent and four newly listed entities jumped to ₹3.5 lakh crore. This is about 67% higher than the one-year average market capitalisation of ₹2.1 lakh crore for the undivided company.The sharp jump indicates that investors are willing to pay a premium for pure-play exposure to sectors such as aluminium, power, zinc and iron ore, and oil and gas.The demerger has resulted in the separation of Vedanta into five listed entities-Vedanta Aluminium, Vedanta Power, Vedanta Oil & Gas, Vedanta Iron & Steel, and a residual Vedanta, which retains zinc, copper and other base-metal businesses.131756913Vedanta Aluminium's price-to-sales multiple of around three is broadly in line with sector peers, suggesting much of its value may already be reflected in the stock.
However, Vedanta Iron & Steel trades at 0.6 times sales, significantly below Tata Steel and JSW Steel, pointing to a persistent discount. Vedanta Oil & Gas occupies a middle ground, trading at 1.5 times sales compared with 0.5 for ONGC and 3.2 for Oil India.A break-up of the combined market capitalisation shows that Vedanta's aluminium business is the dominant value driver, contributing nearly ₹2 lakh crore, or over half of the total valuation. This underscores the scale and earnings strength of the aluminium segment.The residual Vedanta entity accounts for about ₹1.2 lakh crore, translating into roughly one-third of the overall valuation.The higher contribution from aluminium suggests that investor interest remains concentrated in large, cash-generating core businesses, while smaller verticals are yet to see meaningful rerating.On Monday, Vedanta's shares closed at ₹302.6, down 2% while Vedanta Aluminium Metal fell 5% to ₹500.7.
Vedanta Power slipped 1% to ₹41, while Vedanta Oil & Gas declined 5% to ₹37.1. Vedanta Iron & Steel also dropped 5% to close at
₹21.1.
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