Demerges in 2025: ITC, Vedanta, ABFRL, Tata Motors Among The Top Demergers to Watch Out

A wave of corporate restructuring is sweeping through Indian businesses, with several major companies announcing plans to split their operations. These strategic demergers aim to sharpen focus on core areas, raise capital, and enhance shareholder value. While some firms have already executed their business splits, many are preparing to finalise their demerger plans in 2025.

Several major companies, including ITC, Vedanta, Siemens, Tata Motors, and Aditya Birla Fashion, are planning demergers in 2025, creating separate listed entities to enhance focus, unlock shareholder value, and streamline operations. Shareholders will receive proportional equity shares.

Here’s a look at the companies preparing for major demergers in the coming year.

Aditya Birla Fashion’s Spin-Off

Aditya Birla Fashion and Retail Ltd (ABFRL) has approved the demerger of its Madura Fashion & Lifestyle division into a separate entity named ABLBL. The move aims to streamline the company’s diverse portfolio and enhance operational focus.

Demerger Ratio: ABFRL shareholders will receive 1 equity share of ABLBL for every 1 share held in ABFRL.

ITC to Demerge Hotels Business

FMCG conglomerate ITC is gearing up to list its hotels division as a separate entity. The record date for the demerger has been fixed for Friday, January 6, 2025. As per the scheme, ITC will retain a 40% stake in the new entity, ITC Hotels.

Demerger Ratio: Shareholders of ITC will receive 1 equity share of ITC Hotels for every 10 equity shares held in ITC.

Siemens Energy Business Demerger

Siemens India announced the demerger of its energy business into a new legal entity, SEIL, earlier this year. The initiative aims to give the energy division greater autonomy and market focus.

Demerger Ratio: Shareholders of Siemens India will be allotted 1 equity share of SEIL for every 1 share of Siemens India held.

Tata Motors Commercial Vehicle Demerger

Tata Motors is set to separate its commercial vehicle business into a new entity, TMLCV, while integrating its passenger vehicle business into the parent company. Both entities will be renamed as part of the process.

Demerger Ratio: Shareholders will receive an identical 1:1 shareholding in both TMLCV and Tata Motors.

Vedanta’s Multi-Business Demerger

Mining and metals giant, Vedanta, led by billionaire Anil Agarwal, has embarked on a significant restructuring initiative. The plan involves spinning off its aluminium, oil and gas, power, steel, and ferrous materials businesses into independent companies. However, the base metals business will remain within the parent company.

Demerger Ratio: Shareholders will be allotted 1 share in each of the five newly listed entities for every 1 share of Vedanta they own.

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