Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Vedanta - Someone Is Playing Silly Buggers But Even On The Last Day Investor Strategy Matters

Vedanta Delisting Proposal/Offer Fails (We Think)

Currying Favour with Vedanta? I-Sec Report’s Appalling Lapse

Vedanta (VEDL): Cash Raised, Money Flow, and How It Affects Delisting Offer Discovered Price

Vedanta Limited Reports Results: KEY Info on Deal Funding Embedded

Vedanta Reverse Book Build Auction - It’s On And the Schedule From Here Is Tight

Quiddity Advisors

Event-Driven

<p>Today's move lower in <a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd (VEDL IN)</a> on Day 3 of the five-day Reverse Book Build auction to determine a Discovered Price in the Delisting Offer process caught many by surprise. It certainly surprised me. </p>
<p>There are a number of factors which might be blamed for the move on outsized volume, and some are discussed below. One culprit is one or more futures sellers liquidating large size in what should have been a quiet day. There were lots of comments that there may have been shenanigans involved. </p>
<p>The question "where should this fall if the deal breaks?" was on everyone's minds.<br><br>The answer is... difficult.</p>
<p>VEDL has underperformed a basket of its peers by 18% year-to-date as of the 7 October close. And by more than that since the end of February 2020. VEDL is cheap to peers despite debt, so the other question is...</p>
<p><em><strong>What kind of governance discount is really required? </strong></em></p>
<p>Much more below the fold.</p>
<hr>
<div>
<p><em>Insights previously published in the timeline of the Vedanta Delisting Offer are listed below.</em></p>
</div>
<div>
<table class="table table-striped">
<tbody>
<tr>
<td colspan="3" style="width: 724.8px;">
<h3>Relevant Insights To Date</h3>
</td>
</tr>
<tr>
<td style="width: 72px;"><strong>Date</strong></td>
<td style="width: 134.4px;"><strong>Theme or Ticker</strong></td>
<td style="width: 476.8px;"><strong>Insight Title</strong></td>
</tr>
<tr>
<td style="width: 72px;">2019</td>
<td style="width: 134.4px;">Indian M&amp;A Guide</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/quiddity-india-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30885" rel="noopener">Quiddity India M&amp;A Guide 2019</a> </td>
</tr>
<tr>
<td style="width: 72px;">24 May 2020</td>
<td style="width: 134.4px;">Delisting Offers</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/indian-delisting-exit-offers-know-your-process-and-the-games-played" target="_blank" data-smartkarma-citation="insights:39683" rel="noopener">Indian Delisting/Exit Offers - Know Your Process and The Games Played</a> </td>
</tr>
<tr>
<td style="width: 72px;">19 Jun 2020</td>
<td style="width: 134.4px;">Failed Exit Offers</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/failed-exit-offers-in-india-lessons-for-vedl-adani-and-hexw" target="_blank" data-smartkarma-citation="insights:40492" rel="noopener">Failed Exit Offers in India: Lessons for VEDL, ADANI, and HEXW?</a> </td>
</tr>
<tr>
<td style="width: 72px;">27 May 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-delisting-offer-how-it-goes-from-here" target="_blank" data-smartkarma-citation="insights:39761" rel="noopener">Vedanta Delisting Offer - How It Goes From Here</a> </td>
</tr>
<tr>
<td style="width: 72px;">22 Jun 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-delisting-offer-opportunities-and-timing" target="_blank" data-smartkarma-citation="insights:40528" rel="noopener">Vedanta Delisting Offer: Opportunities and Timing</a> </td>
</tr>
<tr>
<td style="width: 72px;">25 Jun 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-buyout-loan-huge-hindustan-zinc-div-but-may-change-vedanta-rbb-timing" target="_blank" data-smartkarma-citation="insights:40653" rel="noopener">Vedanta Buyout Loan = HUGE Hindustan Zinc Div But May Change Vedanta RBB Timing</a> </td>
</tr>
<tr>
<td style="width: 72px;">14 Jul 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/putting-sightlines-on-the-vedanta-discovered-price" target="_blank" data-smartkarma-citation="insights:41236" rel="noopener">Putting Sightlines on the Vedanta Discovered Price</a> </td>
</tr>
<tr>
<td style="width: 72px;">18 Aug 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/putting-sightlines-on-the-vedanta-delisting-offer-timing" target="_blank" data-smartkarma-citation="insights:42260" rel="noopener">Putting Sightlines on the Vedanta Delisting Offer TIMING</a> </td>
</tr>
<tr>
<td style="width: 72px;">7 Sep 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-reaching-the-end-game" target="_blank" data-smartkarma-citation="insights:42969" rel="noopener">Vedanta: Reaching The End Game</a> </td>
</tr>
<tr>
<td style="width: 72px;">17 Sep 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-more-fuel-for-the-fire" target="_blank" data-smartkarma-citation="insights:43316" rel="noopener">Vedanta : More Fuel For The Fire</a> </td>
</tr>
<tr>
<td style="width: 72px;">21 Sep 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-vedl-cash-raised-money-flow-and-how-it-affects-delisting-offer-discovered-price" target="_blank" data-smartkarma-citation="insights:43429" rel="noopener">Vedanta (VEDL): Cash Raised, Money Flow, and How It Affects Discovered Price</a> </td>
</tr>
<tr>
<td style="width: 72px;">29 Sep 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-reverse-book-build-auction-it-s-on-and-the-schedule-from-here-is-tight" target="_blank" data-smartkarma-citation="insights:43694" rel="noopener">Vedanta Reverse Book Build Auction - It’s On And the Schedule From Here Is Tight</a> </td>
</tr>
<tr>
<td style="width: 72px;">4 Oct 2020</td>
<td style="width: 134.4px;">
<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd</a> </td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/vedanta-limited-reports-results-key-info-on-deal-funding-embedded" target="_blank" data-smartkarma-citation="insights:43839" rel="noopener">Vedanta Limited Reports Results: KEY Info on Deal Funding Embedded</a> </td>
</tr>
</tbody>
</table>
</div>

Today's move lower in Vedanta Ltd (VEDL IN) on Day 3 of the five-day Reverse Book Build auction to determine a Discovered Price in the Delisting Offer process caught many by surprise. It certainly surprised me. 
There are a number of factors which might be blamed for the move on outsized volume, and some are discussed below. One culprit is one or more futures sellers liquidating large size in what should have been a quiet day. There were lots of comments that there may have been shenanigans involved. 
The question "where should this fall if the deal breaks?" was on everyone's minds.  The answer is... difficult.
VEDL has underperformed a basket of its peers by 18% year-to-date as of the 7 October close. And by more than that since the end of February 2020. VEDL is cheap to peers despite debt, so the other question is...
What kind of governance discount is really required? 
Much more below the fold.


Insights previously published in the timeline of the Vedanta Delisting Offer are listed below.






Relevant Insights To Date



Date
Theme or Ticker
Insight Title


2019
Indian M&amp;A Guide

Quiddity India M&amp;A Guide 2019 


24 May 2020
Delisting Offers

Indian Delisting/Exit Offers - Know Your Process and The Games Played 


19 Jun 2020
Failed Exit Offers

Failed Exit Offers in India: Lessons for VEDL, ADANI, and HEXW? 


27 May 2020

Vedanta Ltd 

Vedanta Delisting Offer - How It Goes From Here 


22 Jun 2020

Vedanta Ltd 

Vedanta Delisting Offer: Opportunities and Timing 


25 Jun 2020

Vedanta Ltd 

Vedanta Buyout Loan = HUGE Hindustan Zinc Div But May Change Vedanta RBB Timing 


14 Jul 2020

Vedanta Ltd 

Putting Sightlines on the Vedanta Discovered Price 


18 Aug 2020

Vedanta Ltd 

Putting Sightlines on the Vedanta Delisting Offer TIMING 


7 Sep 2020

Vedanta Ltd 

Vedanta: Reaching The End Game 


17 Sep 2020

Vedanta Ltd 

Vedanta : More Fuel For The Fire 


21 Sep 2020

Vedanta Ltd 

Vedanta (VEDL): Cash Raised, Money Flow, and How It Affects Discovered Price 


29 Sep 2020

Vedanta Ltd 

Vedanta Reverse Book Build Auction - It’s On And the Schedule From Here Is Tight 


4 Oct 2020

Vedanta Ltd 

Vedanta Limited Reports Results: KEY Info on Deal Funding Embedded 





INEOS Styrolution India Limited (INEOS IN)

Vedanta Ltd

Vedanta SellDown - Probably Futures