Why Vedanta share fell 12% in two trading sessions

Vedanta share price extended losses for the second consecutive session after the Madras High Court issued a notice to the firm on remediation of contaminated sites at the Tuticorin unit.

The stock was dealt another blow after the Anil Agarwal-led firm's listed operating unit Hindustan Zinc deferred a board meeting scheduled for August 17 for considering an interim dividend.

The issuing of dividend would have constituted major cash flows for the parent.

Reacting to the adverse events, Vedanta share has lost nearly 12% in two sessions. The share plunged 2.84% to Rs 294.05 today against previous close of Rs 302.65 on BSE. Vedanta share, which climbed to a 52-week high of Rs 341.25 on August 16, closed at Rs 302.65 on August 17, down 10 per cent.

The share trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.

It has gained 135.44% in one year and risen 84.55% since the beginning of this year.

In a month, the stock has rallied 9.22%.

Total 10.77 lakh shares changhed hands amounting to turnover of Rs 32.14 crore on BSE. Market cap of the firm fell to Rs 1.09 lakh crore on BSE today.

The large cap stock hit 52-week low of Rs 91.25 on November 4, 2020.

The notice from Madras HC came after a PIL was filed against Vedanta, which sought to remove all contaminated material within Sterlite copper facility of the firm.

The court has given five weeks to reply to the notice. Next hearing is set for late September.

The company's Tuticorin facility is shut since 2018 over pollution concerns after 13 agitators were killed in police firing during a violent protest march.

However, in April 2021, the Tamil Nadu government temporarily allowed the company to open only to produce oxygen amid surging Covid cases for four months.

Vedanta has 65 per cent in Hindustan Zinc. In FY21, Hindustan Zinc paid nearly Rs 5,850-crore dividend to Vedanta.

Shareholders also expect Vedanta to pass on the dividend, declared by Hindustan Zinc in FY21, to its shareholders by October 31 to avail a set-off on dividend tax.

In an exchange filing, Hindustan Zinc said the board meeting scheduled on August 17, 2021, to consider interim dividend for the financial year 2021-22 has been deferred. "Accordingly, the record date of August 26, 2021, as intimated earlier, stands called off," the company said.

However, it did not cite reasons for calling deferring the board meeting and did not announce any fresh date.