The protestors had been demanding a halt in construction and had blamed it for pollution in the area.
Shares of Vedanta fell 6% on Wednesday on reports that nine people were killed in police firing after protests against the closure of Vedanta group's Sterlite Copper plant turned violent in Tamil Nadu's Tuticorin.
Police caned the protesters and restored normalcy.
Police said almost 5000 protesters gathered near a local church and insisted on taking out a rally to the district collectorate after they were denied permission to march to the copper smelter plant.
On Tuesday, protesters set vehicles on fire and threw stones at police as they stormed the district government headquarters and an apartment block for Vedanta employees, the police and a company official said. "Why were automatic weapons used to disperse the crowd and under what law is this permitted?" About 20 police officers were also injured in the skirmish, which occurred in the southern port city Tuticorin.
Rahul Gandhi, the national leader of the opposition Congress party, on Tuesday described the deaths as "a brutal example of state-sponsored terrorism".
Vedanta says the protests were based on "false allegations". "The situation is tense but under control today", he said.
While Tamil Nadu Chief Minister Edappadi Palaniswami said that police had been forced to act "since protesters disregarded a curfew, acted against the advice of police, opposition called it cold blooded murder. Sterlite Copper plant is non-operational as we await approval for the consent to operate", Sterlite said in a late night statement said.
"The police had to take action under unavoidable circumstances to protect public life and property as the protesters resorted to repeated violence", he said.
It was shut briefly after an alleged gas leak in March 2013 that left hundreds with breathing difficulties, nausea and throat infections. A number of people had gathered at the hospital - where the bodies of people who died in Tuesday's protests have been kept - despite the prohibitory orders that are in place, The New Indian Express reported.
Two policemen were also injured, doctors at the hospital said, adding that all injured were stable.More news: First Lady Melania Trump Just Had Kidney Surgery