Vedanta Limited has provided clarification on the Delhi High Court proceedings regarding the government's refusal to extend the Production Sharing Contract for Block CB-OS/2, following a stock exchange query on recent media reports.

Background of Contract Extension Issue

The company had previously informed stock exchanges through a letter dated September 23, 2025, about receiving an intimation from the Ministry of Petroleum & Natural Gas on September 19, 2025, regarding their application for extension of the Production Sharing Contract. The ministry had communicated that the application for extension was not accepted, prompting the company to evaluate available resources to resolve the matter.

Court Proceedings Update

Following the government's decision, Vedanta filed a writ petition before the Delhi High Court challenging the refusal to extend the contract. The latest development shows significant progress in the legal proceedings:

Regulatory Compliance Statement

In its clarification to BSE Limited and National Stock Exchange of India Limited, Vedanta emphasized that the court proceedings did not meet the threshold of materiality under Regulation 30 of SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. The company reiterated its commitment to compliance with SEBI Listing Regulations and assured continued disclosure of all material information and price-sensitive events.

Current Status

The company has confirmed that as of the clarification date, there is no pending information or announcement that may have a bearing on the price or volume behavior of the company's scrip. The status quo directive from the Delhi High Court provides interim relief while the matter undergoes judicial review, with the government required to file its response to the court's notice.

Vedanta shares faced significant selling pressure on Thursday, declining 4.4% to an intraday low of ₹595, as the broader metals sector experienced a sharp selloff driven by weakness in commodity prices.

Market Performance and Sector Impact

The metals sector witnessed broad-based weakness, with commodity price declines weighing heavily on investor sentiment. Key futures contracts across metals traded firmly in negative territory during the session.

The Nifty Metal index reflected this weakness, declining close to 3% with all constituents trading in negative territory. Major metal stocks including Hindalco, Hindustan Zinc, JSW Steel, NMDC, NALCO, Tata Steel, and Jindal Steel were among the notable laggards.

Technical Analysis and Price Outlook

Kunal Parar, Vice President and Technical Research Analyst at Choice Equity Broking, attributed the decline to profit booking after the stock hit record highs near ₹630. From a trading perspective, Parar maintains a cautious near-term view, expecting some cooling off to continue.

The analyst identified ₹580 as an immediate support zone for Vedanta, suggesting this level could offer a buying opportunity if the stock corrects further.

Demerger Plan Receives Approval

In a separate development, Vedanta received approval from the Mumbai bench of the NCLT for its proposed demerger plan. The restructuring will split the company into five separate listed entities, each with distinct strategic focus and dedicated capital structure.

Shareholders of Vedanta Limited will receive one share each in the four newly demerged entities for every share held in the parent company. The transition aims to create focused businesses aligned with long-term global and domestic demand trends.

Market Factors Behind the Selloff

The pressure in the metals space appears to stem from profit booking after recent highs, coupled with a sharp correction in commodity prices. This combination has weighed on metal producers across the board, creating broad-based weakness in the sector.

The selloff reflects the sensitivity of metal stocks to commodity price movements, with investors taking profits amid uncertainty in global commodity markets.