Cairn-Vedanta merger to create a big metals, commodities company; shareholders to gain: Vallabh Bhanshali, Enam Group

In a chat with ET Now, Vallabh Bhanshali, Chairman, Enam Group, shares his views on the Cairn–Vedanta merger. Edited excerpts:

Vallabh Bhanshali: This is a chance to create a big metals, commodities or resources company in the country. There would be investors who would have different views, for instance, those who like conglomerate or standalone businesses and that is a part of the stock and capitalism process. But to have one large company would be a good thing.

ET Now: A Cairn shareholder would say Vedanta has taken my Rs 25,000 crore.

Vallabh Bhanshali: It is all in the price. Stock market is all about what is there in the price. The rest is okay.

ET Now: If I am a minority shareholder, I would say does it make sense for me to buy a small piece of a big behemoth which will never trade at a premium?

Vallabh Bhanshali: When the first round of merger happened in Vedanta, this possibility was very much debated by the investors and it was all discounted in the price as well. So, from that point of shares, stock market democracy point of view or the hegemony of prices, this was fairly well established. And as I said, there are people who like to buy holding companies or conglomerates and those who do not. It is all in the price and it was considerably in the price.

ET Now: But individually, would you like to vote for this merger?

Vallabh Bhanshali: I am not a shareholder and I have not thought about it, but I see that in the long term at these prices, if I am a Vedanta shareholder, definitely I am voting for it. If I am Cairn shareholder, I have to see. They have sweetened this compared to what the media was trying to tell us yesterday and I would vote for Cairn too.