A sharp reset, a major restructuring, and a stock that suddenly looks far cheaper on screens – Vedanta has entered a new phase.
After adjusting for its much-awaited demerger, the share price of the company in the early trading session today has dropped over 64%. This might have left some investors wondering – Is this a real fall in value? This is more of a technical adjustment.
With four separate businesses being separated out and listed over the coming months, the big question is – does this correction offer a fresh entry opportunity, or is there more uncertainty ahead for investors?
Vedanta: What triggered the sharp price adjustment
The adjustment came after a special pre-open session (SPOS) on April 30, which was conducted to discover the ex-demerger price. Since May 1 is a market holiday, April 30 effectively became the ex-date.
As part of the restructuring, Vedanta is splitting into five listed entities. This includes the aluminium, oil and gas, power, steel and iron ore, along with the parent entity.
The current share price excludes the value of these four verticals, which explains the steep drop.
Nuvama on Vedanta: Value remains, despite the reset
According to the brokerage house Nuvama Institutional Equities, the demerger does not weaken the overall investment case. In fact, it could improve valuation transparency.
The brokerage has maintained a ‘Buy’ rating to the Vedanta group stocks with a revised target price of Rs 936. This implies around 21% upside potential from pre-demerger levels.
As per the Nuvama report, “We are increasing FY27E/28E EBITDA estimates by 12% and 13% due to higher aluminium prices, which leads to a revised target price of Rs 936 (earlier Rs 899) for the group. We have separately valued the demerged entities. Maintain ‘Buy’.”
Breaking down the business value
The brokerage has also assigned separate valuations to each business, giving a clearer picture of where value lies.
The report said it values Vedanta’s businesses separately, estimating Rs 336 per share for zinc and copper, Rs 477 for aluminium, Rs 47 for oil and gas, Rs 30 for steel and iron ore, and Rs 47 for the power business.
Growth outlook: Commodity cycle remains key
The future performance of these businesses will largely depend on commodity prices and volume growth.
The Nuvama report pointed out that t, “Amid firm commodity prices and volume growth, all listed entities are likely to record 19–42% EBITDA CAGR over FY26–28, except oil & gas.”
The aluminium business is expected to remain a key driver. The report highlighted that expansion projects, including bauxite and coal mines, are likely to be completed in FY27, which could improve margins over time.
However, there are also changes in how cash flows will be managed. “The company has changed its capital allocation policy wherein VEDL (the residual entity) may not pass on the entire dividend that it will receive from Hindustan Zinc,” the report said.
Vedanta Q4 performance: Earnings supported by metals
Vedanta’s latest quarterly results also reflect improving operating conditions.
According to the brokerage report, Vedanta reported an in-line performance in Q4FY26. Its consolidated adjusted EBITDA stood at Rs 18,450 crore, rising 22% quarter-on-quarter.
The improvement was driven by better realisations and lower cost of production, particularly in the zinc segment. Aluminium earnings also rose.
Numama in its report further noted, “Higher prices, lower zinc CoP boost earnings; EBITDA up 22% QoQ.”
Vedanta – What happens next – Listing timeline for demerged entities
The next big trigger for investors is the listing of the four demerged entities of Vedanta, which is expected by June 2026.
As per the brokerage house report, “Demerger process likely to conclude in Q1FY27.” Once listed, each entity will be tracked separately and could attract different sets of investors.
On the index front, Vedanta will continue to remain part of the Nifty Next 50 index, while the other entities will initially appear as temporary placeholders until they start trading.