Vedanta's Legal Battle Over Demerger: NCLAT Grants Interim Relief

The NCLAT has granted an interim stay on an NCLT order rejecting Vedanta's power business demerger. Vedanta remains committed to its reorganisation plan to unlock stakeholder value. The legal dispute centers on objections by creditor SEPCO, citing non-disclosed liabilities, affecting the demerger process.

The Appellate tribunal NCLAT has provided temporary relief to Vedanta Ltd by staying an earlier decision of the NCLT, which rejected Vedanta's plan to demerge its power subsidiary Talwandi Sabo Power Ltd (TSPL). The stay allows Vedanta to continue pursuing strategic reorganisation of its business units.

The stay stems from an NCLAT order dated May 27, 2025, postponing the NCLT's March 4, 2025 decision, provided certain conditions are met. The decision to grant the stay comes amid ongoing legal challenges, particularly from creditor SEPCO, which raised concerns about undisclosed debts of Rs 1,251 crore in the demerger process.

While SEPCO's objections initially led to the NCLT's rejection of the demerger scheme, Vedanta argues that the decision only affects the TSPL application and not other demerger plans. The case has been adjournedly listed for further hearing on August 4.

(With inputs from agencies.)