Vedanta’s debt drags valuations, Jindal Steel’s Thyssenkrupp bid a short-term play: Axis Securities

Aditya Welekar, Senior Research Analyst at Axis Securities, said the key to unlocking shareholder value for Vedanta lies in “the company’s progress on deleveraging.” He noted that while the stock’s dividend yield is significant, “the market’s focus remains on the reduction of debt.”Also Read | High dividends mask Vedanta’s weak stock performance

Vedanta Resources carries $4.7 billion in holding company debt, while the standalone entity holds ₹58,000 crore. He said this high debt level is the main reason for Vedanta’s lower valuation compared to peers.

Welekar said a non-binding bid by Naveen Jindal’s Jindal Steel International to acquire Thyssenkrupp’s European steel business is expected to have only a short-term impact. While the deal could provide access to the European automotive market, it involves high costs and complex restructuring.
Also Read | Jindal Steel bid lifts Thyssenkrupp shares to highest level in over four yearsHe added that the listed company’s “strong fundamentals and ongoing capacity expansion at Angul should shield it from long-term negative effects,” though the stock may see a sentimental dip initially.

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