Vedanta shares fell as much as 4.7 per cent on BSE in the morning trade on Thursday (Photo: PTI)
Vedanta shares fell as much as 4.7 per cent on BSE in the morning trade on Thursday on reports that rating agency Standard & Poor’s on Wednesday said that the completion of the proposed merger of Cairn India with Vedanta appears uncertain.
At 11.15 am, Vedanta was trading 2.40 per cent lower at Rs 97.45. It opened at Rs 97 and had touched a high and low of Rs 98.50 and Rs 95.10, in trade so far. Meanwhile, the S&P BSE Sensex was down 303 points or 1.18% at 25,415.61.
Standard and Poor’s Ratings Services on Wednesday said it is placing the ratings on Vedanta Resources PLC’s ‘BB-‘ foreign currency long-term corporate credit rating and the ‘BB-‘ long term issue ratings on the firm’s guaranteed notes and loans on CreditWatch with negative implications.
The placement reflects S&P’s view that Vedanta’s move to merge two of its Indian units – Vedanta Ltd., and Cairn India Ltd., – “is critical for the company to withstand a weakness in commodity prices,” credit analyst Mehul Sukkawala, wrote in his note on Wednesday. “However, the completion of the merger is uncertain, in our view.”
Earlier this year, Vedanta Resources has announced to merge two of its Indian subsidiaries Cairn India and Vedanta Ltd., to create a commodities and resources company. But, some of the minority shareholders are against the move, as it give the London-based debt-laden company access to Cairn India’s cash reserves.
So far around 4.74 lakh shares were traded on the BSE as against average daily volume of 10.18 lakh shares in the previous two weeks.
For the quarter ended June 2015, Vedanta India posted a consolidated net profit of Rs 865.94 crore, up 130.57 per cent, against Rs 375.56 crore in the corresponding quarter a year ago.
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