The stock was trading at Rs 268.40 apiece on NSE, down 6.59% from the previous day's close. In the last five days, the stock has lost 12%.
Sentiments were muted on the stock after the government opposed Vedanta's proposal to sell its international zinc business to Hindustan Zinc for $2.98 billion over valuation concerns.
The government has threatened to take legal action to stop the sale of the Africa-based assets to Hindustan Zinc, in which it holds a 29.54% stake. The opposition to the deal comes as a blow to billionaire Anil Agarwal's plans to trim down the mining giant's $7.7 billion net debt.
Hindustan Zinc in January agreed to buy THL Zinc Mauritius from its parent, Vedanta, for $2.98 billion in phases over 18 months. Vedanta holds a 64.92% stake in Hindustan Zinc, an integrated producer of zinc, lead and silver.
Earlier this month, S&P Global Ratings stated that Vedanta's credit ratings might "come under pressure" if it is unable to raise $2 billion and/or sell its international zinc assets.
Vedanta Resources had earlier said it had slashed net debt by $2 billion in the last 11 months to $7.7 billion.Hindustan Zinc CEO Arun Misra had said last week that the company is planning to get in touch with the mines ministry to resolve the differences over the acquisition of overseas assets of holding company Vedanta.
Vedanta's sale of its zinc assets in South Africa and Namibia to Hindustan Zinc is critical to ensuring liquidity at parent company Vedanta Resources.
Analysts have said the deal was unfavourable to Hindustan Zinc's minority shareholders on valuations.
"Vedanta has broken important support levels like 320, and 280. The next support level comes in at 247. Having said that, it is oversold in huge volumes today. A corrective bounce cannot be ruled out sometime down the line, but the technical setup is (13:52) for not only Vedanta, but the entire metals pack," Hemen Kapadia of KRChoksey Securities said.
"So honestly I would stay away. If I were to trade, there will be a very strict stop loss and also looking at the stock at sub-250 sometime down the line. I would not be surprised if we are at 220 a couple of months down the line," Kapadia added.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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