Vedanta's demerger plan gets NCLT nod; can now split business into 5 units

Vedanta Ltd on Tuesday secured approval from the National Company Law Tribunal (NCLT) bench in Mumbai to break up the oil-to-metals conglomerate into five separate units, according to a report by Bloomberg.

A company spokesperson told Bloomberg that the company will proceed with the necessary steps to implement the demerger plan. "The approval marks a key milestone in Vedanta’s transformation into focused, sector-leading companies with clear strategic mandates and dedicated capital structures," the spokesperson said.

Commenting on the development, the company said in a BSE filing, "We wish to clarify that the NCLT has pronounced its order at 2:30 pm today (Tuesday), sanctioning the scheme of demerger. However, the official copy of the order has not yet been uploaded on the NCLT website."

Vedanta added that a detailed disclosure will be made once the order copy is made public.

Why is Vedanta seeking a demerger?

The company aims to complete the split by March 31, 2026. Vedanta Chairman Anil Agarwal has long championed the restructuring as a way to reduce debt burden and allow separate entities to pursue their own growth strategy.

The split would also help advance the company’s expansion plan, including a $10 billion three-year capital expenditure program to boost capacity and earnings, Bloomberg reported.

In February this year, the company received shareholders' and lenders' approval for the demerger.

What would happen after Vedanta demerger?

The initial plan was launched in 2023 after Agarwal failed to take Vedanta private in 2020. The five entities being created from the split would include Vedanta Limited, which will house the world's second-largest integrated zinc producer and third-largest silver producer. The four other entities will be Vedanta Aluminium, Talwandi Sabo Power, Vedanta Steel and Iron, and Malco Energy.

According to the company's demerger scheme, every Vedanta shareholder will receive 1 additional share in each of the 4 newly demerged companies on the completion of the demerger process.