Vedanta receives clearances from BSE, NSE for proposed demerger

Text to remember: Mining conglomerate Vedanta Ltd announced on Wednesday that it has obtained clearances from major stock exchanges BSE and NSE for its planned demerger. This development is significant as it will pave the way for Vedanta’s division into six independent listed companies, including oil and gas and aluminium. In a regulatory filing, Vedanta stated, “BSE and NSE, through their letters dated July 31, 2024 and July 30, 2024 respectively, have conveyed that they have ‘no objections/no adverse observations’ on the proposed scheme.”

The company also mentioned that it will soon submit an application with the National Company Law Tribunal (NCLT). It noted, “The demerger plan is subject to receiving other necessary statutory and regulatory approvals, including those from the National Company Law Tribunal and the respective shareholders and creditors, as per applicable laws.” Vedanta Ltd reported that it has received approvals from a majority of its creditors for the proposed demerger of businesses, marking a crucial step in the company’s plan to split into six independent listed companies. The demerger will result in the creation of independent companies housing the aluminium, oil and gas, power, steel and ferrous materials, and base metals businesses. The existing zinc and new incubated businesses will remain under Vedanta Ltd.

“Vedanta’s demerger will create sector-focused entities, aligned with India’s global leadership goals in critical minerals, energy security, as well as renewables and technology sectors,” the company stated. The demerger will also simplify the company’s corporate structure by creating independent businesses and will offer global investors direct investment opportunities in pure-play companies linked to the country’s impressive growth.

The company’s “existing businesses will be structured into the six independent companies after the demerger: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Ltd,” it was mentioned. Vedanta Ltd, led by Anil Agarwal, reported a 27.2% decline in consolidated net profit to Rs 1,369 crore for the March quarter due to a one-time impairment of Tuticorin asset.

The company had posted a consolidated net profit of Rs 1,881 crore in the year-ago period, as per the regulatory filing. The consolidated income of the company in the January-March period dropped to Rs 36,093 crore, compared to Rs 38,635 crore in the year-ago period. As of March 31, 2024, Vedanta’s gross debt was at Rs 71,759 crore.