Why Vedanta Aluminium shares are down 14% in 3 days

Why Vedanta Aluminium shares are down 14% in 3 days

Vedanta Aluminium, touted as the "crown jewel" of Vedanta Group, has witnessed a massive 14% decline in its shares within three days of listing.

The stock hit its lower circuit for three consecutive sessions and touched ₹454.90 today, wiping out over ₹29,000 crore from its market value.

The fall is mainly due to a drop in global aluminum prices after an Iran-US peace deal improved Middle East supply chains.

Peace deal between Iran and US impacts aluminum prices

The peace deal between Iran and the US has allowed more aluminum to flow through major routes such as the Strait of Hormuz.

This has led to a decline in prices and a corresponding fall in Vedanta Aluminium's market cap.

The company's market capitalization has dropped from over ₹2 lakh crore at launch to about ₹1.75 lakh crore now.

Analysts previously recommended Vedanta Aluminium as a top pick

Analysts had previously highlighted Vedanta Aluminium as a top pick.

ICICI Direct had noted its strong contribution to group revenues and margins, along with favorable industry dynamics such as tight global supply, high aluminum prices, and capacity expansions driving volume growth.

However, the recent peace deal has changed the global aluminum supply landscape.

India's largest aluminum producer

Vedanta Aluminium is India's largest aluminum producer and also has a significant presence in the US, Europe, Middle East, Australia, and Africa.

It produced over half of India's aluminum at 2.42 million tons in FY25.

The company operates a 5 MTPA alumina refinery in Odisha's Kalahandi district and the world's largest aluminum plant at Jharsuguda with a capacity of 1.85 MTPA.