Anil Agarwal-led Vedanta Group stocks like Vedanta Power and Vedanta Iron & Steel, extended their losses for the second consecutive session on Wednesday. Shares of Vedanta Group companies declined by up to 5% during intraday trading on September 16.
Vedanta Group company Sterlite Technologies hit 5% lower circuit for the second straight session.
The group’s flagship company, Vedanta share price was trading 0.7% lower on the NSE. Meanwhile, shares of Vedanta Power and Vedanta Iron & Steel fell by up to 2%. Vedanta Oil & Gas was also trading marginally lower, down 0.2%.
On the other hand, other Vedanta Group stocks, Hindustan Zinc and Vedanta Aluminium Metal, turned positive and were trading over 1% higher on Wednesday.
Why Vedanta Group stocks are falling?
According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, Vedanta Group stocks fell around 2–5%, driven mainly by weakness in global commodities, profit booking and a broader risk-off sentiment rather than any significant company-specific negative trigger.
The decline came amid weakness across the broader metal sector as investors turned cautious following a strong rally in several commodity-linked stocks. Vedanta has substantial exposure to aluminium, zinc, lead, silver and oil & gas, making its earnings and valuations highly sensitive to movements in global commodity prices.
“Any decline in metal prices can lead to relatively sharper selling in high-beta stocks such as Vedanta. The broader macroeconomic backdrop has also weighed on sentiment. Brent crude remained above $100 a barrel, trading around $107 amid ongoing geopolitical tensions and supply disruption risks. While elevated crude prices can support Vedanta’s oil and gas business, expensive oil is negative for the Indian economy as it fuels imported inflation and puts pressure on the rupee. More importantly, higher crude prices have raised concerns that central banks globally could keep monetary policy tight for longer. The US 10-year Treasury yield crossing 5% has also made fixed-income assets more attractive and reduced appetite for emerging-market equities. Such an environment tends to weigh more heavily on cyclical and highly leveraged stocks,” she said.
Srivastava also pointed to the rupee’s weakness around ₹95–96 against the US dollar and continued risk reduction by foreign investors as factors contributing to market volatility. Vedanta’s recent strong gains had also left the stock susceptible to profit booking once overall market sentiment weakened sharply.
“Today’s decline should not be viewed as a sign of fundamental deterioration in Vedanta’s business. The long-term investment case for the group remains supported by commodity prices, strong cash generation, deleveraging and the potential for value unlocking following the demerger. Therefore, the current 3–5% correction appears to be driven more by macroeconomic and commodity-related factors than company-specific concerns. However, prolonged weakness in global metal prices, crude remaining above $100 and elevated US bond yields could continue to weigh on Vedanta in the near term,” Srivastava said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
