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Vedanta squeaks after the big bang

Mumbai, Dec. 5: Vedanta Resources Plc, the holding company of the Sterlite group, made a modest debut on the London Stock Exchange a day after raising $1.08 billion in the biggest Indian initial public offer overseas.

A clamour from potential investors had prompted the promoters, the Agarwals, to scale up the offer from 110 million shares to 130 million, at a price of 390 pence each.

When trading commenced today on the London Stock Exchange under what is known as conditional dealings, the Vedanta share was quoted at 379-1/4p, a discount to the listing price.

A company statement put the market capitalisation of the stocks offered at $1.92 billion. Senior Sterlite officials said the shares would be formally listed on December 10.

“I am delighted at the success of the public offer. Vedanta will benefit from India’s dynamic growth and its mineral resources. We must now deliver to our shareholders on planned projects,” Anil Agarwal, chief executive officer and founder-promoter of the Sterlite group, said.

The lacklustre debut on the London stock market this morning, blamed on hedge funds, robbed the biggest primary market floatation this year of some sheen.

The issue size could go up by another 74 million pounds, at current prices, if investment bank JP Morgan — which along with HSBC was the lead bank in the deal — sells its allocation of another 19.5 million shares.

“This is an endorsement of our assets and management, and the governance of the London bourse, the market of choice for big mining companies,” said Vedanta chairman Brian Gilbertson, who earlier headed BHP Billiton, the world’s largest diversified miner.

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