Vedanta Demerger Gets NCLT Approval; Focus Shifts to Execution and Debt Allocation

Mumbai | December 18, 2025

Shares of Vedanta Ltd surged to a fresh record high of ₹580.45 apiece on the NSE in early trade on Wednesday after the company announced that the Mumbai Bench of the National Company Law Tribunal (NCLT) has sanctioned the Scheme of Arrangement for its proposed demerger.

According to Vedanta Group Chairman Anil Agarwal, the demerger into five listed firms is likely to be completed by March 2026, subject to remaining approvals.

What has been approved

Under the approved scheme, Vedanta will demerge into five standalone listed companies, covering:

• Vedanta Aluminium
• Vedanta Oil & Gas
• Vedanta Power
• Vedanta Iron & Steel
• Vedanta Limited (Parent Company housing base metals, including zinc and copper)

What Will Existing Shareholders Get

Existing shareholders of Vedanta will receive shares in each of the demerged entities in proportion to their current holdings. The restructuring will be implemented over the coming months, subject to completion of remaining regulatory and procedural formalities.

Rationale behind the restructuring

Vedanta operates across multiple commodity and energy segments, each with distinct business cycles, capital intensity and valuation drivers. Over time, this complexity has made it challenging for investors to assess the underlying performance of individual businesses, with the stock often trading at a conglomerate discount.

The demerger is intended to:

• Improve visibility into segment-wise performance
• Enable more focused capital allocation
• Enhance comparability with sector peers
• Provide flexibility for future fundraising and strategic decisions

Market participants have long argued that Vedanta’s aluminium, zinc and oil & gas businesses warrant differentiated valuations, which are difficult to capture within a consolidated structure.

What the approval means going forward

With the tribunal approval in place, investor attention is now shifting to execution-related aspects, particularly:

• Allocation of debt across the demerged entities
• Capital structure and leverage at each company
• Management and governance frameworks
• Timeline for listing of the new entities​
• Allocation of debt across entities, given Vedanta’s leveraged balance sheet
• Clarity on how borrowings are apportioned, which will be critical for valuation.

Operating environment remains unchanged

The approval does not alter Vedanta’s near-term operating backdrop, which continues to be influenced by global commodity prices, demand conditions and regulatory developments. Performance across aluminium and zinc remains sensitive to international prices, while oil & gas earnings are linked to crude price movements and production dynamics.

Management has indicated that the restructuring will allow each business to pursue growth strategies aligned with its specific market conditions and investment requirements.

Bottom line

The NCLT approval marks a significant step forward in Vedanta’s demerger process. While the demerger offers long-term structural clarity, markets are now focused on execution, debt allocation and listing timelines. Until these details emerge, stock performance is likely to remain influenced by broader market sentiment and commodity price trends.

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