Vedanta Secures Key Exchange Clearances for Major Demerger

Vedanta Ltd has received clearances from BSE and NSE for its proposed demerger, paving the way to split into six independent listed companies. The approval from creditors is a significant milestone, and the demerger aims to simplify the company’s structure and focus on sector-specific growth.

Mining conglomerate Vedanta Ltd announced on Wednesday that it has received necessary clearances from major exchanges BSE and NSE for its proposed demerger.

This development marks a significant step towards Vedanta's plan to split into six independent listed companies, including divisions for oil and gas and aluminium.

The company stated in a regulatory filing, “... BSE and NSE, via letters dated July 31, 2024, and July 30, 2024, respectively, have conveyed their 'no objections/no adverse observations' on the proposed scheme.”

Vedanta plans to soon file an application with the National Company Law Tribunal (NCLT) as part of the approval process. The demerger requires further statutory and regulatory nods, including approvals from the NCLT, shareholders, and creditors.

Earlier, the company announced it had received approval from 75% of its secured creditors for the proposed demerger, a crucial move before seeking clearances from stock exchanges.

The proposed demerger will result in six independent companies focusing on aluminium, oil and gas, power, steel and ferrous materials, and base metals, while existing zinc and new incubated businesses will remain under Vedanta Ltd.

“Vedanta's demerger aims to create sector-focused entities that align with India’s goals in critical minerals, energy security, renewables, and technology sectors,” the company stated.

The initiative is expected to simplify Vedanta’s corporate structure and attract global investments into these pure-play companies.

Post-demerger, the existing businesses will be organized into six independent companies: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Ltd.

Vedanta Ltd, led by Anil Agarwal, reported a 27.2% decline in consolidated net profit for the March quarter, amounting to Rs 1,369 crore, attributed to a one-time impairment of the Tuticorin asset.

The company had reported a consolidated net profit of Rs 1,881 crore in the corresponding period the previous year. Consolidated income decreased to Rs 36,093 crore for the January-March period, compared to Rs 38,635 crore the prior year.

As of March 31, 2024, Vedanta's gross debt stood at Rs 71,759 crore.