Shares of Vedanta Ltd. fell the most in nearly six weeks after the Anil Agarwal-led miner put up its shuttered copper smelter in Tamil Nadu for sale.
The company, in conjunction with Axis Capital, has invited bids for the facility located in Tuticorin, according to a newspaper advertisement. The last day to submit the expressions of interest is July 4, 2022.
The copper plant contributes around Rs 25,000 crore to the exchequer, 12% of Thoothukudi port’s revenue and 96% of the market share for sulphuric acid in Tamil Nadu, the advertisement read.
Vedanta had stopped production at the Sterlite copper plant for maintenance in March 2018 and later extended the shutdown on Tamil Nadu government’s order following deadly protests over pollution concerns.
About 13 people were killed in a police firing during protests in May 2018. Vedanta then approached the National Green Tribunal, which in December 2018 allowed reopening of the Sterlite copper unit. But the NGT’s ruling was set aside by the Supreme Court on the grounds that the Madras High Court was the appropriate authority to hear the case.
In August 2020, the Madras High Court rejected Vedanta’s plea to reopen the smelter. The case then moved to the Supreme Court. While the top court in December 2020 rejected the company’s petition for restarting the facility on a temporary basis, it said it would review the plea in detail. The apex court began hearing Vedanta’s appeal against the Madras High Court in March 2022. The case is pending.
The Tuticorin plant has been catering to 40% of national demand of copper, a Vedanta spokesperson said. “…We are exploring options to make sure that the plant and the assets are best utilised to meet growing demand of the nation.”
Shares of Vedanta dropped as much as 12%, the worst since May 6, in intraday trade on Monday. Of the 18 analysts tracking the company, 13 maintain a ‘buy’, two suggest a ‘hold’ and three recommend a ‘sell’, according to Bloomberg data. The 12-month consensus price target implies an upside of 88.1%.