As Vedanta concludes its mega demerger, the shares of the Anil Agarwal-led company are set to be removed from the MSCI Global Standard Indexes starting June 22.
MSCI announced on Tuesday that Vedanta, now the residual entity following the group's demerger, will be removed from its Standard and Large Cap indices after the spin-off.
The move follows the breakup of the original Vedanta, previously tracked by MSCI, into five separate listed companies, leaving the residual Vedanta with a significantly smaller market capitalisation. The final phase of the conglomerate’s mega demerger was completed on Monday, when four newly carved-out businesses- Vedanta Aluminium, Vedanta Power, Vedanta Oil & Gas, and Vedanta Iron & Steel- made their stock market debut on the BSE and NSE after a special pre-open session.
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Vedanta demerger
Vedanta Aluminium shares are listed as the only large-cap on the list, debuting at Rs 527 apiece on the BSE with a market capitalisation of Rs 2.06 lakh crore, surpassing its parent Vedanta. Vedanta Power debuted at Rs 41.30 per share, while Vedanta Oil & Gas and Vedanta Iron & Steel were listed at Rs 39 and Rs 22 apiece, respectively.
The Anil Agarwal-led group had announced in April that each eligible shareholder would receive one share in each of the four companies for every Vedanta share held on the record date, in what is among India’s biggest corporate restructurings in the metals and mining sector.
Also read: Vedanta Aluminium lists at Rs 527 on BSE after demerger. Is it the group’s new crown jewel?
Vedanta had fixed May 1 as the record date for the much-awaited demerger. While Vedanta shares have already adjusted for the restructuring, investors were awaiting the listing of the four spun-off entities.
What does this mean for shareholders?
Nuvama, in an earlier note, had said that Vedanta was a part of the MSCI Emerging Markets Index with a weight of nearly 78 bps, and also featured in the FTSE indices with around 77 bps weight. It expected all Vedanta entities, except for Vedanta Aluminum, to be deleted or, subject to cut-offs, potentially moved to MSCI’s smallcap index.
The brokerage expects FTSE to auto-adjust Vedanta’s weight and retain Vedanta and Vedanta Aluminum in the index. “The treatment of other demerged entities remains subjective, and they may be temporarily retained with minimal weights or eventually excluded, depending on index criteria,” it said.
Typically, such rejigs in indices result in some volatility in the share price. Vedanta shares declined more than 2% to trade below Rs 296 apiece in the afternoon.
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