After best month in two years, Vedanta shares poised for their worst one in four years

Shares of Vedanta Ltd., the Anil Agarwal-owned mining conglomerate, fell another 3% on Thursday, June 25, in-line with the fall in other metal stocks, on account of a stronger US Dollar.

The US Dollar Index has now gone past the mark of 101.5. A rising Dollar is generally negative for metals as it reduces the purchasing power of customers who end up buying lesser for more.

Vedanta shares had declined earlier in the week as well, after promoter entity Twin Star Holdings sold shares worth over ₹1,800 crore via block deals, bringing the promoter holding further lower in the company.

In an interaction with CNBC-TV18 during the listing of Vedanta's demerged entities, Group Chairman Anil Agarwal had highlighted that he does not mind paring stake as long as the company continues to grow and do well.

Vedanta's New Foray

In an exchange filing on Wednesday evening, Vedanta said that it is incorporating a new wholly-owned subsidiary, Vedanta Property Platforms Ltd., which will serve as a strategic platform for undertaking real estate business and ancillary activities.

Vedanta: Share Price Action

With Thursday's fall, shares of Vedanta are down over 22% for the month of June with two more trading sessions to go.

This has turned out to be the worst month for the mining conglomerate in the last four years. The stock had declined 30% back in June 2022. Incidentally, the fall comes just a month after the shares had risen nearly 30% in May, which turned out to be the best month for it in the last two years.

On the charts, shares of Vedanta are now nearing "oversold" levels, with its Relative Strength Index (RSI) showing a reading close to 33. An RSI reading below 30 means that the stock is "oversold".

The stock has also broken below key levels on the charts, including its 50-Day Moving Average, which was at ₹307 and also closed below its 100-Day Moving Average of ₹283. The next level on the downside is the 200-Day Moving Average, which is at levels of ₹240.

Vedanta recently completed the demerger of its Aluminum, Power, Oil & Gas, and Iron & Steel divisions. The returns seen in May were during the first full month that the stock traded without its demerged entities. The new entities recently made their stock market debut.

Group Chairman Anil Agarwal is aiming for a combined EBITDA of $10 billion in the coming years, led by a $20 billion capex. He also told CNBC-TV18 that the funding will be done through a combination of equity, debt and internal accruals.