Vedanta Share Price Target ₹601: Nuvama Sees 35% Upside After Jaiprakash Acquisition

Vedanta’s shares have been struggling lately, but analysts at Nuvama Institutional Equities believe there’s a silver lining — a potential upside of over 35% on the Anil Agarwal-led metal and mining powerhouse.

A Rocky Year for Vedanta

Over the past year, Vedanta’s stock has largely remained under pressure. It’s slipped by 5.38% in the last 12 months and barely budged over the past six, with less than a 1% decline. However, recent developments have thrown the spotlight back on the company.

The Big Bet on Jaiprakash Associates

Vedanta’s share price fell by 2.21% on Monday, closing at ₹435.05, after analysts raised concerns over its aggressive expansion plans. The trigger? Vedanta’s successful bid to acquire Jaiprakash Associates Ltd (JAL) — a debt-laden company involved in real estate, cement, power, hotels, and infrastructure.

In a dramatic auction, Vedanta outmaneuvered rivals like the Adani Group with an offer valuing the assets at a net present value (NPV) of ₹12,505 crore. As part of the acquisition, Vedanta will pay ₹4,000 crore upfront once approved by the National Company Law Tribunal (NCLT), with the balance spread over the next 5 to 6 years.

JAL is currently under the Corporate Insolvency Resolution Process (CIRP) after facing a massive unpaid debt of ₹55,371.21 crore as of August 15, as disclosed in its filings.

Concerns Amid the Opportunity

While this acquisition could unlock significant value, experts caution that venturing into unrelated businesses could strain Vedanta’s financial health at a time when it should prioritize debt reduction.

Nuvama’s analysts warned,

“Getting into unrelated businesses when deleveraging should be the priority is a cause for concern. Funding the entire ₹17,000+ crore will be challenging, although some assets may be quickly monetized to support the balance sheet.”

Despite these concerns, the brokerage retained a ‘buy’ recommendation, with a target price of ₹601, implying a potential 35% upside from current levels.

What’s Next for Investors?

Nuvama believes Vedanta’s focus will remain on its core businesses, especially power, and expects asset monetization efforts to ease financial pressures. However, the final outcome will depend on how the acquisition unfolds and how successfully Vedanta balances growth with debt management.

The analysts concluded,

“We await the finalization of the resolution plan before updating our estimates. For now, we retain our ‘buy’ stance.”

Disclaimer: This article is for informational purposes only. The views expressed are those of analysts and do not constitute investment advice. Investors are advised to consult certified experts before making financial decisions.