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Indian oil-to-metal giant Vedanta has put up its infamous Thoothukudi plant on the block and asked invited interested parties to submit their EOIs (Expression of Interest).
For the unversed, Vedanta is a globally diversified company that supplies zinc, lead, silver, iron ore, steel, copper, aluminum, power, oil, and gas. It has operations across India, South Africa, Namibia, Ireland, and Australia. It is the Indian subsidiary of London-listed Vedanta Resources PLC.
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"Interested and financially competent parties shall submit an expression of interest along with company profile and other relevant credentials latest by 1800 hours, 4th July 2022," Vedanta said in a newspaper advertisement.
The Thoothukudi plant has been shut down ever since 2018. Early in 2018, people protested against the plant's harmful effects on the air, water, and soil in the area. Matters took a turn for the worse when the company announced that it was planning on doubling its copper smelting facilities to make the plant "one of the world's largest single-location copper smelting complexes".
The protests magnified as people gathered in large numbers and protested heavily. On 22nd May, when these protestors, reportedly thousands, forced their way to the Collector's Office, police open fired on them, killing 14 and injuring 100s. A week after the massacre, the Tamil Nadu government ordered the closure of the plant, citing air and water pollution as the reason.
Nearly 7 months later, people of the village said that they were misled by people who came to the village and spread propaganda against the plant. Due to the closure of the plant, all developmental activities carried out by the plant in the area came to a halt and all 5000 employees were left jobless. India slipped from its position as one of the top 5 exporters of copper cathodes.
The sale offer includes the smelter, oxygen generation facilities, RO units, residential homes, and other facilities on the plant. The plant is reported to account for almost 40% of India's total copper output.
The Tuticorin plant is a national asset that has been catering to 40 percent of our national demand for copper and has played an integral role in India's self-sufficiency in copper. In the best interest of the country and the people of Tamil Nadu, we are exploring options to make sure that the plant and the assets are best utilized to meet the growing copper demand of the nation," Vedanta said in its official statement.
After the announcement yesterday, the stock, which had registered sharp falls last week, fell 12.69% to close at Rs 230.45 per share. Today, the stock opened marginally better but closed higher at Rs 236.05 per share, or 2.43% higher.
Even though the stock has declined 19% in the last 5 trading sessions, global brokerage JP Morgan has maintained an 'Overweight' rating on the share and expects the share to rally 110% from its current price!
Article by Aman Agarwal.
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