Vedanta's stock slips over 2% amid CFO's resignation reports
What's the story
Vedanta's shares dipped over 2% in early trade on October 23 following a Bloomberg report that said the company's Chief Financial Officer (CFO), Sonal Shrivastava, may step down just months after joining the firm in June. Sources familiar with the matter told the news outlet that Shrivastava informed Vedanta founder Anil Agarwal about her decision last month. If her resignation is accepted, she will become the third CFO to depart the mining conglomerate in under six months.
Details
Decision on replacement expected this week
Agarwal is reportedly in discussions with finance professionals who have previously worked with the group to find a replacement for Shrivastava, and a decision could be reached as soon as this week. At the time of writing, Vedanta's shares were trading at 1.5% lower at Rs. 219.40 on NSE. This news arrives at a critical time for Vedanta Resources Ltd, the parent company of Vedanta, which is facing approximately Rs. 24,900 crore in bond repayments over the next two years.
What Next?
Previous CFO departures at Vedanta
In 2021, Vedanta saw its former CFO, GR Arun Kumar, depart after a failed privatization attempt by Agarwal. More recently, in the current year, Ajay Goel also resigned. Vedanta wants to separate its metals, power, aluminum, and oil and gas divisions into separate listed companies. They also intend to restructure their profitable zinc unit as a way to create value and reduce debt. This demerger is expected to be completed in 12-15 months, subject to the required approvals.
Insights
Vedanta's demerger strategy
According to Vedanta's statement, the demerger is designed to streamline the corporate structure with industry-focused independent businesses, offering global investors, including sovereign wealth funds, retail investors, and strategic investors, direct investment opportunities in dedicated pure-play companies connected to India's growth story. The company predicts that commodity demand will surge exponentially as India develops world-class infrastructure and aggressively pursues energy transition goals.