Vedanta Iron & Steel shares hit 5% upper circuit, other Vedanta stocks also rise; key updates

Vedanta Group stocks were trading in positive territory in the afternoon deals on Tuesday, September 22, even as benchmark indices were in the red.

At 1:17 PM, Vedanta Iron & Steel shares were locked in the 5% upper circuit limit at ₹32.21 apiece on the NSE, while Vedanta Oil and Gas was up over 2% to ₹34.57. Parent firm Vedanta shares stood at ₹262.35 apiece on the NSE, up 0.71%, while Vedanta Power was up 1% at ₹31.09.

Vedanta Aluminium Metal shares were up 2.98% at ₹425.35 apiece on the NSE, while Hindustan Zinc (HZL) was flat at ₹591.80.

Here are the key updates for market participants

Vedanta Iron and Steel may be seeing a positive sentiment rub-off from the sharp rise in domestic steel prices, driven by costlier raw materials, particularly coking coal, and improving post-monsoon demand, according to market research firm BigMint.

Domestic steel prices hit a four-year high, according to the market research firm.

The trend is expected to continue over the remaining quarters of the ongoing fiscal year, BigMint said in a report.

Hot rolled coil (HRC) and cold rolled coil (CRC) — two of the most common types of flat steel products used globally — are currently trading at ₹64,000 per tonne and ₹75,000 per tonne, respectively. Such levels were last seen in June 2022, BigMint data showed.

Since August 1, HRC and CRC prices have increased by ₹6,000 per tonne and ₹8,500 per tonne, respectively. At the start of August, HRC and CRC prices stood at ₹58,000 per tonne and ₹66,500 per tonne, respectively.

Details to know

The rise in steel prices is broadly positive for steel producers, as higher realisations can help offset the increase in coking-coal costs and support margins. BigMint said domestic steel prices have reached a more-than-four-year high, supported by improving post-monsoon demand, lean inventories and price hikes by steel mills.

Among other steel stocks, Jindal Steel, Tata Steel and JSW Steel were also trading in the green.

Key facts

Vedanta Ltd is a diversified natural resources company with interests across zinc, lead, silver, aluminium, oil and gas, iron ore, steel, power and other businesses.

Following the group’s restructuring, the company has retained its zinc business, including a nearly 61% stake in Hindustan Zinc, while also housing businesses such as FACOR and other emerging ventures.

The broader Vedanta group has operations and assets across India and overseas.

Demerged entities

As part of its demerger, Vedanta has separated its key businesses into focused entities — Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power and Vedanta Iron & Steel — alongside Vedanta Ltd.

Vedanta Aluminium houses the Lanjigarh refinery, Jharsuguda smelter and its stake in BALCO; Vedanta Oil & Gas comprises the Cairn oil and gas business; Vedanta Power includes assets such as Talwandi Sabo Power and other thermal power projects; while Vedanta Iron & Steel houses the group’s iron ore and steel businesses, including Sesa Iron Ore and ESL Steel.

Vedanta Iron & Steel

The entity focuses on the group’s ferrous metals business, including iron ore mining and steel production.

Its portfolio includes Sesa Iron Ore, which has iron ore mining operations in Goa and Karnataka, and ESL Steel, an integrated steel producer in Jharkhand with a design capacity of 3.5 million tonnes per annum.