In a major win for billionaire Anil Agarwal’s mining conglomerate, the National Company Law Tribunal (NCLT) has officially approved the demerger of Vedanta Limited. The decision clears the path for the company to split into five independent, listed entities, a move designed to unlock significant value for shareholders and simplify the group’s complex structure.
Following the approval on Tuesday, Vedanta’s stock surged to a lifetime high, reflecting strong investor confidence in the restructuring plan.
Creating 5 New Giants
Under the approved plan, Vedanta Limited’s diverse portfolio will be carved out into separate, sector-focused companies:
- Vedanta Aluminium
- Vedanta Oil & Gas
- Vedanta Power
- Vedanta Iron and Steel
- Vedanta Base Metals
The existing company, Vedanta Limited, will continue to operate as a separate entity, retaining its majority stake in Hindustan Zinc Limited and housing new incubation businesses.
Current shareholders of Vedanta Limited will receive one share of each of the five new companies for every one share they hold in Vedanta Limited. The management expects this “pure-play” structure to attract specific investor bases for each sector—energy, metals, and power—similar to how global majors operate.
Overcoming Government Objections
The approval comes despite strong opposition from the Ministry of Petroleum and Natural Gas (MoPNG). The government had raised concerns regarding the transfer of the company’s oil and gas assets (formerly Cairn India), arguing that such a transfer required prior permission under the Production Sharing Contracts (PSCs) for oil blocks in Rajasthan and elsewhere.
However, the NCLT bench dismissed these objections as “premature.” The tribunal noted that the demerger scheme is fair and compliant with the law. Crucially, the court clarified that the approval of the demerger does not exempt Vedanta from seeking necessary government permissions later. The company must still comply with all contractual obligations regarding its oil blocks in due course, ensuring the government’s interests remain protected.
What’s Next?
With the NCLT nod in place, Vedanta will now move towards the final listing of the new entities. The demerger is expected to be completed within this financial year, offering shareholders direct ownership in five distinct asset classes.
The company had previously secured approvals from its shareholders and creditors, as well as “No Objection” letters from stock exchanges BSE and NSE.
