What Triggered The Fall In Vedanta Share Price? Government Raises 4 Major Concerns!

Vedanta Ltd. came under the spotlight on Wednesday, September 17, 2025, after the government raised multiple concerns during the National Company Law Tribunal (NCLT) hearing on its proposed demerger. The development led to a sharp intraday decline in Vedanta's share price before a partial recovery later in the session.

Government Raises 4 Major Concerns Relating to Vedanta’s Demerger

During the hearing, the government flagged 4 key issues relating to Vedanta’s demerger scheme:

• Financial risk post demerger
• Misrepresentation of hydrocarbon assets
• Insufficient disclosure of liabilities
• Violation of SEBI disclosure norms

The authorities argued that the demerged entity, Malco Energy, could move towards liquidation, making recovery of government dues extremely difficult.

Questions Over Asset Coverage

According to government claims, Vedanta’s current assets stand at over ₹2 lakh crore, which is about 12.3 times higher than the total government demand of ₹16,000 crore. If the demerger proceeds, asset coverage could fall significantly. Malco Energy, the entity expected to emerge from the split, reportedly has assets worth only ₹29,000 crore and a negative net worth as of March 2024.

Claims Of Undisclosed Liabilities

The government has highlighted an arbitral dispute amounting to over ₹5,900 crore, alleging that Vedanta failed to disclose this liability. Officials further accused the company of representing blocks sanctioned for exploration as assets, and of taking “massive loans” on these “assets” without necessary government approval.

Vedanta’s Response At NCLT

Vedanta countered the allegations by stating that all creditors and stakeholders have already approved the demerger scheme. The company also noted its willingness to provide corporate guarantees to secure government dues. In its defence, Vedanta emphasised that there is no legal requirement for any additional disclosure and clarified that the government has not opposed the demerger outright.

Vedanta Share Price Performance

Following the developments, Vedanta share price saw significant movement during the day. As of 2:25 PM on September 17, 2025, the stock was down 1.12% at ₹456, recovering from the day’s earlier low.

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Conclusion

The NCLT proceedings and the government’s objections have placed Vedanta’s demerger plan under close watch. While the company maintains its stance on compliance and stakeholder support, the raised concerns highlight the uncertainties that could influence future developments.

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