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    Why Sebi needs to probe Vedanta delisting fiasco

    Synopsis

    Minority shareholders have been clearly short changed, says Nitin Raheja

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    Today the promoters are meeting the management to discuss what they are going to come up with. But the whole modality has left a very sour taste in the mouth, says Nitin Raheja, Co-Founder, AQF Advisors.

    The Vedanta story is turning out to be a little tricky for minority investors. It looks like shares will be back into demat accounts only on Tuesday evening and thus can be sold at best by tomorrow and payment will come in by Wednesday?
    That is a technical part. Some of the investors that we work with have already received credit in their accounts. But what is really interesting to me is what is the definition of unconfirmed bids. I really fail to understand that because when you have people who are bidding and online you have bids going in, what is this unconfirmed bid and how is this bid being withdrawn at the last moment?

    Even till the middle of the day, I remember seeing an interview of Mr Agarwal talking about having received over 90% of what they were looking for. So something very strange has happened. This actually warrants a look through by Sebi. You have had bids going up all the way up to Rs 320 which LIC has bid and if you really saw the screen the other day, it was really weird. At the upper end, there were some bids which were made even at ridiculous prices of lakh of rupees and so on and which were of course withdrawn.

    So it calls into question the whole process. It calls into question the whole intention on the part of the management, the kind of write offs that were done in the books just prior to this. It does not really have a very good ring to it and more so minority shareholders have been clearly short changed in the whole process. And to add to that, there were a lot of broking companies who were recommending to their HNI investors based on reports that had come out by shareholder oriented agencies to buy the stock and submit at higher bids. So I am sure you are going to see short-term pressure with a lot of those people who are essentially playing this delisting game getting out now. However, there is value in the stock.

    The commodity cycle is going through a virtuous upcycle, more so in case of aluminium and that is almost 50-60% plus of Vedanta’s business. Today with the kind of debt that it sits on, that represents almost no value but you will see that happen. I would like to wait because today the promoters are meeting the management to discuss what they are going to come up with. But the whole modality has left a very sour taste in the mouth.

    It is clearly going to be all about IT this week. What are your expectations?
    The initial numbers from Tata Consultancy Services (TCS) have sort of given a perspective in terms of what we should expect from the IT sector. The Covid episode and the resultant work from home has actually accelerated digitisation and the move towards cloud. Larger companies are going out and trying to get large deals as far as infrastructure and the cloud space is concerned. The smaller, midcap companies are actively scouting out for deals to help a lot of companies to actually move to the cloud and digitise their operations even faster. So IT seems to be a good space.

    Having said that, their stocks have run up quite a lot. All of them are trading at close to multi-year highs of their recent past. The scope for disappointment is very low. I believe that this story has legs and has some way to run. But most of them are already pricing this story for their immediate term.
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    3 Comments on this Story

    bsrahmd 53 days ago
    On one hand we want to be like the world class standards financial hub like London, New York, .... but in practise still the same shady narrow dark street pedallers in coat ,suit and tie. No different from the cheap politics the political parties play ! Very disappointed with conduct , as in World Cup Soccer Finals, declaring minus goals after full time in favour of host country ! Makes one wonder what India is all about ! Casts suspicious in everything India do. As said below , Regulators , wake up ! Stand up for India !
    Vishal 53 days ago
    Clear case of fraud. There is no regulator in india. All sleeping.
    Suresh Kamath53 days ago
    THIS FIASCO is a CLEAR CASE of FRAUD by this PROMOTER of Vedanta and SEBI and the AUTHORITY which overlooks such OFFENCE Must arrest IMMEDIATELY for such OPEN FRAUD on the PUBLIC and ripping TRUST of the INVESTORS in these Stocks and NOTHING Less than ASSETS seizure of ALL GROUP Companies in INDIA and also OVERSEAS and such LOOT cannot be acceptable and SEBI Need to ACT NOW and ED and EOW must set out a LOOK OUT Notice and NEVER allow the ENTIRE BOARD of Directors to LEAVE INDIA
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