Vedanta To Divide Business Into Six Listed Ventures Through Demerger – News18

On September 29, Vedanta Resources, owned by billionaire Anil Agarwal, unveiled the establishment of independent verticals through the demerger of its underlying companies.

In a regulatory filing, the company disclosed that its Board of Directors, during a meeting held on the same day, approved the demerger of diversified businesses to unlock significant value.

As part of this strategic move, Vedanta Limited is set to transform into six separate listed entities, each with a distinct focus:

• Vedanta Aluminium
• Vedanta Oil & Gas
• Vedanta Power
• Vedanta Steel and Ferrous Materials
• Vedanta Base Metals
• Vedanta Limited

The demerger is structured as a vertical split, entitling shareholders to receive, for every 1 share of Vedanta Limited, an additional 1 share in each of the newly listed companies, totaling five new entities. This decision reflects Vedanta’s commitment to a pure-play, asset-owner business model, marking a significant step towards enhancing overall shareholder value.

The company will spin off its metals, power, aluminium and oil and gas businesses and an official announcement is likely this week, news agency Reuters quoted a source as saying.

The move will need shareholder and other regulatory approvals and the process could take two to three months, the source said, declining to be named as they are not authorised to speak to the media.

The company was valued at 776.29 billion rupees ($9.33 billion) as of Wednesday, down by about a third so far this year.

Chairman Anil Agarwal said last month that Vedanta will consider separately listing all or some of its businesses, in contrast to his failed attempt in 2020 to delist Vedanta to speed up the process of simplifying its corporate structure.

Vedanta Resources, the UK-based parent of Vedanta Ltd, has been scrambling to raise funds due to rating downgrades and concerns about meeting debt obligations.

Earlier this year, Agarwal sought to trim down the group’s debt load of $7.7 billion by getting Hindustan Zinc Ltd, a unit of Vedanta Ltd, to buy some of the parent’s zinc assets in a $2.98 billion deal.

However, the Indian government, which owns nearly 30% stake in Hindustan Zinc, opposed the move.