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# Oil India signs contract for 12 oil blocks; Vedanta 10, ONGC 8
State-owned ONGC and Oil India Ltd alongside private sector Vedanta Ltd Tuesday walked away with almost all of the oil blocks auctioned in the latest licensing round as part of the government’s effort to raise domestic production.
Vedanta, which had walked away with 41 out of the 55 blocks offered in OALP-I last year, bid for 30 areas
Looking at the inventory levels in the company, depressed levels of share prices linked to current down turn in the markets and globally depressed commodity prices.
I cant help feeling that new round of co-ordinated quantitative easing will have an effect on both.
Vedanta is showing positive flow for few years now, consistently i.e. they have figured out the business and are focussed.
Underlying ethic is to make money - for example, Anglo-American failed merger made money for all involved.
Anil Aggrawal is focused and highly influential
so, I think this share price is bound to reflect the focus at some point in time. It seems to be sureshot buy if anyone is not worried about the opportunity costs.
Disclaimer : I hold some shares
What do you think?
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update on the mining
Vedanta has proposed to delist their shares from NSE and BSE at an offer price of 87.5
Very bad move by management of Vedanta for minority shareholders at current time. Mainly because they have to now take exit from Vedanta shares at distressed time when stock is trading at 5 year lows hence every investor including mutual fund managers have to book losses big time and then management decided delisting price at 87.50 when CMP was 89. Sebi needs to act against such unethical promoters which proves to be detrimental for minority shareholders
(Disc: i am investor in it)
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But how can they de-list at this price? It will have to be at a higher price than market price. Else noone will sell them shares. I think the market will not let them delist at below 100-110. Traders will make it difficult for them
Discl:
Bought at 140. Was hoping to hold it and ride the cycle out.
Its not that simple to delist shares. If I remember correctly, a company can only be delisted if >90% shareholders agree to the delisting price. More details in this ET article.
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They had tried this earlier also in 2001-02 when they mailed cheques to investors and if the cheques were not returned or if they did not reply to the company saying they were not consenting,their shares were considered as tendered by default,many investors thought it was mandatory to accept the offer.
SEBI went to the high court against this,Sebi lost the case,ultimately the delisting failed because they could not get 90% shares.
Another company that tried something similar was Godrej Industries.
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Anybody has an idea wat happens next in dis case?? The price seema to he low and the minority shareholders will reject. If the price goes way high in Reverse book building, then the promoters might not accept.
Smone who has experienced this before can throw light on how things might proceed frm.here
Discl:- Not invested. Bt I sense an Arbitrage here at CMP
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Promoters have about 50.1% holding and for successful delisting they need 90%.
The price discovery in reverse book building is likely to be significantly higher.
Volcan Investments,the group parent company already has huge debt obligations,I am not sure how much premium they can offer.
The current market cap is about 33-34k Crores,at about 55-60k Crores they will need about $3-3.5 billion to even make an offer to have some chance.
Anyhow their board is meeting on the 18’th and we’ll have a better idea then whether they are serious or not.
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Debt Obligations coming due means the promoter will want the delisting to complete as soon as possible. But that can only happen if they would have quoted a reasonable price(for minority shareholders)
Or isn’t it the case that the promoters also knew that reverse book building will raise the price so they started with a low enough floor price. Thoughts…
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This company is perfect case study of bad corp governance , investors in other group company beware.
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In 1998, when Harshad Mehta, a fallen idol and the main accused in the securities scam of 1992, was looking to make a comeback, Anil Agarwal’s Sterlite was among the three stocks that he brazenly tried to manipulate and take to new highs. The investigation unearthed links with the promoter group. The other two were Videocon and BPL.
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In 2012, when P Chidambaram was the finance minister, Vednata courted huge controversy over the formation of Sesa Sterlite on terms that would help manage the debt of Vedanta Resources plc. The criticism by proxy advisors made no difference. The company splurged big sums of money on a PR blitz to promote its social work and silence critics, activists and civil society.
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In 2018, its copper smelter at Thoothukudi in Tamil Nadu was shut after 13 people died in police firing during protests. This was not the first time there was problem here. There was another well-reported incident in the 1990s. The plant remains shut today.
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If promoter is so much desperate to delist why cant he simply buy outstanding shares from open market?
- Only a small part of the outstanding shares are offered for selling any given day.
- Even if we assume that all outstanding shares are available for purchase- As per SEBI rule, open offer will have to be mandatorily offered to public shareholders whenever any entity’s stock purchase goes above a certain threshold. Promoter cannot just simply buy all the outstanding shares even if it is available.
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well said and since I had started the thread and a couple of times I try to enter in the scrip when I dive little below I found the issue is there in corporate governance I try to sit on sidelines and VP community had helped me to stop in investing in this I am really grateful to be a part of community .What I sum up from my learning the scrip there should not be any compromise on the credibility of the promotors even the story is world class and holding of major resources but I found the management does not care about the minority stack holders and involve in Sharpe practices .
only thing which a retail investor control is the price he is paying for the equity . Margin of safety comes second to the credible management that is JOCKEY of the company . I had burnt the fingers in past which gave me the learning to google the background of the promotors with no exception even to independent directors .
regards
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