Vedanta Shares Fall Over 4% After SC Refuses Concessional Diesel Purchases

On 23 March 2026, shares of Vedanta Ltd fell 4.11% to close at ₹644.60 after the Supreme Court ruled that it could not buy diesel at discounted prices. The ruling may increase operating costs and put pressure on the company’s margins.

The ruling also comes at a time when the company declared a third interim dividend for FY 26. The interim dividend of ₹11 per share, the record date of which is set as 28 March, will result in a payout of ₹ 4,300 crore for the company.

Supreme Court Upholds Earlier Ruling

Previously, the Bombay High Court had ruled that Vedanta cannot procure high-speed diesel (HSD) using Form C, through which companies can buy certain goods at lower tax rates under the Central Sales Tax framework.

The Supreme Court upheld that decision and said that Vedanta had used diesel beyond the allowed purposes, which were supposed to be limited to mining operations and machinery use only. Investigations found that the company had resold the fuel to other transporters against the prescribed regulations.

What Is The Potential Impact On Vedanta?

The tax-rate difference is the major issue here. The VAT rates on diesel can be as high as 19% in some states.

Earlier, Vedanta was allowed to get diesel on concessional tax at the rate of around 2% using Form C. However, following the court verdict, it will have to pay the full tax. So, it is a matter of increased fuel costs leading to lower margins, higher logistics and production costs, and overall profitability.

In sectors like metals and mining that are very capital-intensive, even a small increase in costs can have a big impact. The global commodity markets are already very volatile, which adds more uncertainty to future cost and profit expectations.

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Stock Market Reaction

Following the verdict, Vedanta’s share price fell over 5% during Monday’s early trading session and reached a low of around ₹637.

This comes at a time when the company’s board is scheduled to meet to discuss the payout of an interim dividend to its shareholders. The record date for this payout is 27 March 2026. Known for its attractive dividend payout ratio (DPR), Vedanta has already paid ₹23 per share in FY 25-26 in two interim instalments.

Sources:

ET

Live Mint