Nuvama Institutional Equities called the move “negative for minority shareholders.” According to the brokerage, Vedanta should prioritise debt reduction rather than venturing into unrelated and loss-making businesses. While the company could monetise some of the acquired assets, Nuvama said the deal is likely to cap any stock re-rating in the near term. Nuvama has a Buy call with a price target of Rs 446.
ICICI Securities was more critical, pointing out that Jaiprakash’s portfolio shows a “fundamental lack of synergy” with Vedanta’s core commodities businesses.
Calling the deal “the cart before the horse,” it argued that Vedanta’s ongoing demerger, aimed at giving investors focused exposure to commodities, sits uneasily with the addition of cement, real estate, and fertilizer.
“In our view, it appears like the cart has been placed before the horse. At this point, our opinion is that the company may look to keep the power, real estate, construction, and fertiliser businesses at best, and may part with cement and other businesses (since the plant is far from existing steel/power business, use of slag and fly ash does not seem to be an option),” the domestic brokerage said in a note dated September 8.
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Citi Research cautioned that uncertainty around the acquisition could create an overhang on the stock. The brokerage expects Vedanta’s net debt-to-EBITDA, excluding Hindustan Zinc, to reach 2 times by March 2026. Citi has maintained a ‘Buy’ rating on Vedanta with a target price of Rs 500.The acquisition gives Vedanta a mix of businesses spanning cement, power, fertiliser, real estate, hospitality, and engineering & construction. The payment structure is staggered over five years, with an initial instalment of about Rs 3,700–3,800 crore due after approvals, followed by Rs 2,700–3,300 crore annually. While this reduces immediate pressure on cash flows, the concern is less about the timing of payments and more about what Vedanta is buying.
Jaiprakash Associates, incorporated in 1995 as the flagship of the Jaypee Group, has long struggled with debt and delayed projects. Its revenues in FY24 were dominated by fertiliser (45%) and construction (35%), while real estate contributed just 15%, hampered by legal disputes.
The company also owns a 24% stake in Jaiprakash Power Ventures, which operates 2,200 MW of hydro-thermal capacity, and has access to around 10 million tonnes of cement capacity, only partially operational. Many of these businesses have been loss-making for years.
For Vedanta, which is focused on zinc, aluminium, oil & gas, and power, the assets offer little synergy. Analysts believe the company may eventually sell off non-core pieces such as cement and real estate, but the immediate addition of complex, litigation-prone businesses raises more questions than answers.
With volatile commodity markets and its own expansion projects still underway, Vedanta’s timing has added to the skepticism.
At about 2 pm, shares of the company were trading at Rs 436.25, down 2.2% from the previous close on the NSE. Vedanta shares are down 2% year-to-date.
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