Vedanta Announces Demerger Approval and Restructuring Plan

On July 30, 2024, Vedanta Limited, a top global company in critical minerals, energy, and technology, announced that 75% of its secured creditors had approved its plan to move forward with its demerger. Vedanta will now seek clearance from stock exchanges and file its demerger scheme with the National Company Law Tribunal (NCLT).

Strategic Vision for Self-Reliance and Growth

Vedanta’s demerger aims to support India’s vision of self-reliance in natural resources by creating focused entities in critical minerals, energy security, renewables, and technology. This move will simplify Vedanta’s corporate structure by forming independent businesses, providing global investors with direct opportunities to invest in companies driving India’s significant growth.

Restructuring into Six Independent Companies

After the demerger, Vedanta’s current businesses will be restructured into 6 independent companies: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Limited.

Shareholder Benefits and Historical Returns

The demerger will be a straightforward split, where shareholders will receive 1 share of each of the 5 new companies for every 1 share of Vedanta Limited they hold. Vedanta has a history of providing strong returns to its shareholders, with a total return of 276% over the past 5 years and an average accumulated dividend yield of 65% as of June 30, 2024.

Diverse Natural Resources Portfolio

Vedanta is the only diversified natural resources company in the Indian subcontinent, having invested over $35 billion in India. It rapidly expands through 50 strategic growth projects and holds a unique asset portfolio. Vedanta is India’s sole producer of zinc and silver, among the largest globally and the country’s largest aluminium producer. It is also the largest private-sector producer of oil and one of the biggest power generators and renewable energy purchasers in India. Additionally, Vedanta is the only producer of nickel in India and manages various key metals and minerals, including chromium, copper, iron ore, and steel.

About Vedanta Limited

Vedanta Limited is a leading global company in critical minerals, energy, and technology. Vedanta’s major sectors include Oil & Gas, Zinc, Lead, Silver, Copper, Iron Ore, Steel, Nickel, Aluminium, Power, and Glass Substrate, and it is expanding into electronics and display glass manufacturing.

On July 31, 2024, the share price of Vedanta Limited opened at ₹453.00, touching the day’s low at ₹445.50, as of 09:55 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.