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NEW DELHI: Shares of Vedanta plunged 18 per cent on Friday morning suffering its biggest fall since January 2008.
The company posted a 26 per cent drop in consolidated net profit at Rs 1,574 crore in the Q3FY19 against Rs 2,114 crore in Q3FY18 hit by lower commodity prices and disruption in its copper smelter operations at Tuticorin.
Also, Vedanta's subsidiary Cairn India Holdings bought a stake of Rs 1,431 crore in Anglo American from Volcan Investments, a family trust of promoter Anil Agarwal.
Commenting on the development, Sameer Kalra of Target Investing said, "We believe this is negative for Vedanta as the company transfers Rs 1,431 crore cash to group company given that it has net debt level of Rs 19,000 crore even after accounting cash and investment balance of Hindustan Zinc which is Rs 23,333 crore is not usable by the company."
"Post the transaction Cairn India Holding does not have voting right in Anglo American Plc.
The voting right remains with Volcan Investments (promoter group).
The funds might be used to buy further voting rights in Anglo American Plc.
We have a SELL rating on the company," he added.
The scrip hovered at Rs 161.75 down 18.10 per cent at around 09:45 am while the benchmark BSE Sensex was up 0.28 per cent at 36,359.66.
Meanwhile, the shares of Vedanta opened at Rs 180 on BSE against its previous closing of Rs 197.50.
