The Vedanta Group, comprising Vedanta Ltd and Hindustan Zinc Ltd, has emerged as the top wealth generator for investors on Dalal Street in the current fiscal year. According to stock exchange data, the combined market valuation of both companies has surged by an impressive Rs 2.2 lakh crore between March 28 and June 20, 2024. This growth surpasses the market cap increases seen by other leading Indian businesses, including Reliance Industries, Mahindra Group, and the Tata Group, during the same period.
The surge in Vedanta Group’s market capitalisation reflects a doubling of share prices from their 52-week lows, driven by multiple positive factors. Key contributors include the proposed demerger, consistent management focus on deleveraging, and significant improvements in earnings. In comparison, both Adani and Mahindra groups saw their market caps rise by Rs 1.4 lakh crore each, while Tata Group’s market cap grew by over Rs 60,600 crore. Meanwhile, heavyweight Reliance Industries Ltd (RIL) experienced a decline in market valuation by more than Rs 20,656.14 crore during this timeframe.
Here are some FAQs on wealth creation by Vedanta Group:
What has driven the significant rise in Vedanta Group’s market capitalisation?
The share prices of Vedanta and Hindustan Zinc have doubled from their 52-week lows due to several positive factors, including the proposed demerger, the management’s consistent focus on deleveraging, and significant improvement in earnings.
How does Vedanta Group’s market cap growth compare to other leading Indian businesses?
The Vedanta Group’s market capitalisation surged by over Rs 2.2 lakh crore, which is higher than the growth seen by other leading Indian businesses like Reliance Industries, Mahindra Group, and the Tata Group during the same period.
What financial performance did Vedanta deliver in FY24?
Vedanta delivered its second-highest-ever revenue of Rs 1,41,793 crore and an EBITDA of Rs 36,455 crore in FY24, with an EBITDA margin of 30% despite a moderate commodity cycle.
What are Vedanta Group’s future financial goals?
Vedanta Group aims to achieve an EBITDA of USD 10 billion in the near term, supported by the timely execution of more than 50 high-impact growth projects across zinc, aluminium, oil & gas, and power businesses.
What has been the trend in institutional investment in Vedanta Group?
The rising conviction of investors in Vedanta Group is evident from the increasing shareholding of institutional buyers. Foreign institutional investors’ holding in Vedanta rose to 8.77% at the end of the March quarter from 7.74% a quarter ago.
How have Vedanta and Hindustan Zinc stocks performed recently?
Vedanta and Hindustan Zinc stocks hit their all-time highs of Rs 506.85 and 807 on May 22. On Thursday, Vedanta shares jumped 4.86% to Rs 470.25, while Hindustan Zinc climbed 2.29% to Rs 647.65 on the BSE.
What are Vedanta Group’s plans for raising funds?
Vedanta will raise up to 10 billion rupees (nearly $120 million) by issuing non-convertible debentures through a private placement. Additionally, Vedanta’s board has approved raising up to $300 million through debentures and a further up to $1 billion, although the structure and mode of the fundraise are yet to be decided.
What are Vedanta’s future expansion plans?
The company aims to expand capacity for its steel and aluminium business, proposing to set aside $1.90 billion as capital expenditure for fiscal 2025, higher than the $1.4 billion the year before.
What financial challenges does Vedanta face?
Vedanta’s net debt rose by 25% to 563.38 billion rupees as of March 31, while its full-year cash and cash equivalents fell to 28.12 billion rupees from 69.26 billion rupees a year earlier.
(With inputs from agencies)