Vedanta shares rise for fourth straight session; here’s why

Shares of Vedanta Ltd rose for the fourth straight session today after board of the firm cleared raising of Rs 2,100 crore via issuance of non-convertible debentures (NCDs) through private placements. The NCDs would be raised in one or more tranches, the company said.

Meanwhile, Sensex and Nifty ended 520 points lower and 121 points lower at 59,910 and 17,706, respectively.  However, Vedanta stock closed 1.22% higher at Rs 279.05 against the previous close of Rs 275.70 on BSE. Market cap of the firm stood at Rs 1.03 lakh crore.

In terms of technicals, the relative strength index (RSI) of Vedanta stands at 45.6, signaling neither the stock is overbought nor oversold. The stock has a one-year beta of 1.5, indicating very high volatility during the period. Vedanta shares are trading higher than the 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages.

The PE ratio of Vedanta stands at 7.01 signaling the stock is undervalued compared to its industry. The PE of the mining industry stands at 14.39. The move to raise funds comes at a time when Vedanta Ltd’s parent firm Vedanta Resources is seeking to shore up funds to trim debt.

In March, Vedanta had cleared its fifth interim dividend of Rs 20.50 per share or a total of Rs 7,621 crore for FY23. With this, the total outgo by way of dividends for FY23 was at about Rs 37,733 crore.

In its Q4 update, the Mumbai-based mining company said that its total aluminium production almost came flat. Vedanta said total aluminium production rose 0.3 percent at 574 kt in Q4 as compared to 572 kt in the same period last fiscal. It also added that the cast metal aluminium production rose 1 percent quarter-on-quarter with Jharsuguda ramp up.

Also read: Infosys shares settle 9% lower after hitting one-year low; support seen at Rs 1,200 level, analysts say