Vedanta Share Price Recovers from Low; Demerger Approved by Shareholders and Creditors

Vedanta Ltd has secured strong approval for its demerger proposal, with 99.99% of shareholders, 99.59% of secured creditors, and 99.95% of unsecured creditors voting in favour of the split. The company, in its stock exchange filing, confirmed the approval and outlined the next steps in the demerger process.

Vedanta’s share price recovers from the day’s low to trade near the day’s high. As of 10:58 AM on February 20, 2025, the stock is trading 0.68% higher.

Key Details of the Vedanta Demerger Scheme

Under the demerger plan, each Vedanta shareholder will receive 1 additional share in each of the 4 newly created entities upon the completion of the process. The restructuring aims to enhance focus, operational efficiency, and investor interest in each of the individual businesses.

The 5 Newly Formed Companies

Following the demerger, Vedanta Ltd will be divided into 5 independent, sector-specific companies:

1. Vedanta Aluminium – One of the world’s largest aluminium producers.
2. Vedanta Oil & Gas – India’s largest private-sector crude oil producer.
3. Vedanta Power – A key player in India’s power generation sector.
4. Vedanta Iron & Steel – Managing a scalable ferrous portfolio.
5. Vedanta Limited – Retaining its interests in Hindustan Zinc, the world’s second-largest integrated zinc producer and third-largest silver producer.

Additionally, Vedanta Ltd will serve as an incubator for emerging businesses, including technology ventures.

Strategic Rationale Behind the Demerger

Vedanta’s leadership has stated that the demerger will help streamline operations and improve the efficient utilisation of assets. By separating business verticals, each entity will be better positioned to:

• Focus on core competencies.
• Optimise operational efficiencies.
• Attract targeted investments and strategic partnerships.
• Secure independent funding through debt or equity markets.

Market Implications and Investor Perspective

The restructuring is expected to unlock value for shareholders by allowing them to invest selectively in businesses that align with their financial strategies and risk appetites. Different entities will have the flexibility to pursue sector-specific growth opportunities without being constrained by the broader conglomerate structure.

The move is also anticipated to enhance capital market access, making it easier for each company to secure funding tailored to its industry needs.

Regulatory Approvals and Next Steps

While the demerger has received shareholder and creditor approval, it remains subject to regulatory clearances, including those from the National Company Law Tribunal (NCLT) and other statutory authorities. The company will continue to navigate the required approvals before finalising the separation process.

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