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Vedanta slips nearly 2% in trade post Sterlite plant shutdown
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Vedanta stock on Tuesday opened with a 5.54% loss after the Tamil Nadu government ordered permanent shutdown of Vedanta Resources’ Sterlite plant at Tuticorin on Monday. State Industrial Promotion Council of Tamil Nadu (SIPCOT) wrote to the company on Tuesday stating that since there have been a series of agitations surrounding Sterlite Copper, the land price for the allotment will …
Continue reading “Vedanta slips nearly 2% in trade post Sterlite plant shutdown”
Vedanta stock on Tuesday opened with a 5.54% loss after the Tamil Nadu government ordered permanent shutdown of Vedanta Resources’ Sterlite plant at Tuticorin on Monday.
State Industrial Promotion Council of Tamil Nadu (SIPCOT) wrote to the company on Tuesday stating that since there have been a series of agitations surrounding Sterlite Copper, the land price for the allotment will be refunded as the expansion approval stands cancelled.
After the opening, the stock managed to erase a loss of more than a percent and was trading with nearly a loss of 4%. Yet, it was the top index loser.
The stock was further trading off lows with a 2.48% loss, as of 10:10 am and a 1.22% loss as of 12:37 pm. The stock remained the top index loser in intraday trade.
Towards the close, the stock has recovered from its lows and is trading at nearly a percent loss, as on 03:11 pm.
Tamil Nadu government issued the order after people in Tuticorin took to streets, demanding the closure of the copper smelter on environmental grounds.
Terming the closure of the plant an “unfortunate development”, Vedanta said it would study the situation and decide on a future course of action.
The smelter, which has a carrying value of Rs 2,130 crore, accounts for about 46% of India’s copper smelter capacity and about 2% of global copper capacity.
The stock has been trading in the red for the past five days.
Demonstrations against the copper plant, one of India’s biggest, have been going on for more than three months, with protesters alleging that it is a major source of pollution and risk to fisheries.
“This can lead to investors becoming more conscious against investing in the company which can hurt long term sustainability of some of the businesses,” said Shriram Subramanian, managing director of proxy advisory firm InGovern, to Reuters, adding that the violence in Tamil Nadu suggested they weren’t listening to concerns about the environment and health issues.
The company has been facing many problems in India.
Several cases have been filed against the Tamil Nadu plant since it started in 1996, and the Supreme Court in 2013 had even fined the company about $18 million for breaking environmental laws.
In the following year, Vedanta lost a battle to mine bauxite in the lushly forested area, Niyamgiri hills in Odisha state, that the Dongria Kondh tribe there considers sacred.
The rejection forced the company to not only import expensive bauxite for an aluminium plant in the same state but to also delay its expansion.
Agarwal, who holds a 71.4 percent stake in Vedanta, told the Financial Times in an interview published on Wednesday that he plans to step back from running the company.
(With inputs from Reuters)
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