How Vedanta becomes the biggest wealth creator ever in FY25

How Vedanta becomes the biggest wealth creator ever in FY25

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Vedanta GroupThis company comprising Vedanta Limited and Hindustan Zinc Limited has emerged as the biggest wealth gainer for investors on Dalal Street in the current fiscal year. According to stock exchange data, the combined market valuation of the two companies has increased by a whopping Rs 2.2 lakh crore between March 28 and June 20, 2024. This growth has surpassed the market capital growth witnessed by other major Indian businesses, including Reliance IndustriesMahindra Group, and Tata GroupDuring the same period.
Vedanta Group booms Market capitalization The stock prices have seen a two-fold jump from the 52-week low, driven by several positive factors. The key contributors include the proposed divestment, continued management focus on deleveraging, and significant improvement in earnings. In comparison, both the Adani and Mahindra groups saw their market capitalisation increase by Rs 1.4 lakh crore, while the Tata Group's market capitalisation rose by over Rs 60,600 crore. Meanwhile, the market valuation of behemoth Reliance Industries Ltd (RIL) declined by over Rs 20,656.14 crore during this time period.
Here are some frequently asked questions on wealth creation by Vedanta Group:
What is the reason for the significant increase in the market capitalisation of Vedanta Group?
Share prices of Vedanta and Hindustan Zinc have doubled from their 52-week lows on the back of several positive factors, including the proposed split, management’s continued focus on deleveraging and significant improvement in earnings.
How does Vedanta Group's market capital growth compare to other leading Indian businesses?
Vedanta Group's market capitalisation increased to over Rs 2.2 lakh crore, higher than the growth witnessed by other major Indian companies such as Reliance Industries, Mahindra Group and Tata Group during the same period.
How did Vedanta perform financially in FY24?
Vedanta achieved its second-highest revenue of Rs 1,41,793 crore and EBITDA of Rs 36,455 crore in FY24 with an EBITDA margin of 30% despite a moderate commodity cycle.
What are the future financial targets of Vedanta Group?
Vedanta Group aims to achieve US$ 10 billion EBITDA in the near future, supported by the timely execution of over 50 high-impact development projects across zinc, aluminium, oil & gas and power businesses.
What has been the trend of institutional investment in Vedanta Group?
The growing confidence of investors in the Vedanta Group is evident from the increasing share of institutional buyers. The share of foreign institutional investors in Vedanta increased to 8.77% at the end of the March quarter from 7.74% a quarter ago.
How have the shares of Vedanta and Hindustan Zinc performed recently?
Shares of Vedanta and Hindustan Zinc hit their all-time highs of Rs 506.85 and Rs 807 on May 22. On Thursday, Vedanta shares jumped 4.86% to Rs 470.25 on the BSE, while Hindustan Zinc shares climbed 2.29% to Rs 647.65.
What are Vedanta Group's plans to raise funds?
Vedanta will raise up to Rs 10 billion (about $120 million) by issuing non-convertible debentures through a private placement. In addition, Vedanta's board has approved raising up to $300 million and $1 billion through debentures, although the structure and method of raising funds have not yet been decided.
What are Vedanta's future expansion plans?
The company aims to expand the capacity of its steel and aluminium businesses, and proposes to set aside $1.90 billion in capital expenditure for FY25, up from $1.4 billion in the previous year.
What are the financial challenges that Vedanta is facing?
Vedanta's net debt rose 25% to Rs 563.38 billion as of March 31, while its full-year cash and cash equivalents fell to Rs 28.12 billion from Rs 69.26 billion a year ago.
(with inputs from agencies)

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