Rajveer Sekhawat 
Vedanta Limited, a global natural resources conglomerate, operating in critical minerals, energy and technology, continues to shape the country’s corporate landscape with its transformative initiatives. In a move that reflects its focused growth and commitment to shareholder value creation, the company announced a major demerger plan, expected to be completed by September 30, 2025. The five companies formed post Vedanta stock split will include Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, and the already listed Vedanta Limited, all of which will have the potential to become $100 billion firms each.
Vedanta’s demerger move will ease corporate structures and enhance sector-specific competitiveness. The company states that the idea behind this historic demerger is to create pure-play entities in critical minerals, transition metals, energy and technology sectors, where investors have the freedom to invest in areas of their interest. With Vedanta Ltd. currently contributing almost 1.4% to India’s GDP, there is a need for more Vedantas to unlock the sector’s true potential. Vedanta stock split is expected to unlock significant shareholder value across Vedanta’s diverse business, enable full capitalisation of its asset potential, and strengthen the balance sheet for each business unit, all resulting in enhanced value creation.
Highlights of Vedanta Stock Split
- The demerger will simplify the company’s corporate structure with sector-focused independent businesses.
- It opens doors for global investors, including sovereign wealth funds, retail investors, and strategic investors, to directly invest in dedicated pure-play companies linked to India’s remarkable growth story through Vedanta’s world-class assets.
The demerger improves the visibility of each business’s uniqueness, technological advancements, environmental stewardship, and robust growth stories within Vedanta’s family of companies.
Why Demerger and What Will Change?
Vedanta’s demerger plans align with its long-term vision to streamline its portfolio and allow its various business verticals, each with distinct market dynamics and growth trajectories, to operate independently. According to Anil Agarwal, Chairman of Vedanta, the demerger stock split will create four new natural resource-focused entities, with each having an independent management, distinct capital structures, and assets. This move will further help in creating a large number of downstream industries and job opportunities for the people of India.
After the Vedanta stock split, Vedanta will transform into five independently listed companies. Vedanta Ltd. will continue holding its stake in Hindustan Zinc and will act as an incubator for new businesses, including Vedanta’s technology verticals. Vedanta Resources, the parent company, will remain the holding company.
Vedanta Demerger: Resultant Entities
Post Vedanta Demerger, the company will split into separate entities for aluminium, oil and gas, power, and base metals. Further details related to the same are written below:
- Vedanta Limited: The listed entity, Vedanta Ltd. (BSE:VEDL) will continue holding its stake in Hindustan Zinc. Post the demerger, the shareholders will get one share of each of the four newly listed companies.
- Vedanta Aluminium: This entity will house Vedanta’s aluminium business, including the world’s largest aluminium plant in Jharsuguda, Odisha and hold a 51% stake in BALCO (Bharat Aluminium Company).
- Vedanta Oil & Gas: It looks after the Oil and Gas business, India’s largest private oil, gas and sweet crude exploration and production company, accounting for more than a quarter of India’s domestic crude oil production
- Vedanta Power: This entity will include all Independent Power Plants at Vedanta. Anchored by Talwandi Sabo Power Limited (TSPL, a wholly-owned subsidiary of Vedanta Limited), a 1980 MW plant based in Mansa, Punjab, the business will also include the 600 MW Jharsugada power plant, the recently acquired 1200 MW Athena plant and the 1000 MW Meenakshi plant.
- Vedanta Steel and Ferrous Materials: This company will manage the domestic iron ore business, Liberia assets, and ESL Steel Ltd., prioritizing the steel industry.
The stock split gives investors the flexibility to hold sector-specific investments as per the market trends and risk appetite. With time, these independent units are anticipated to attract distinct investor groups, establish deeper collaborations, and unlock sector-specific growth opportunities.
Vedanta Demerger Ratio
Post demerger, each Vedanta shareholder, both retail and institutional, will get one new share in each of the newly demerged companies. In simpler words, Vedanta’s shareholders will get ONE additional share in each of the four newly demerged companies along with the ONE share of Vedanta they own. Apart from this, there will be no change in the overall shareholding structure. Vedanta’s unique and irreplaceable assets, sector-leading position, dynamic management, and financial discipline will help it have a stronger growth trajectory and higher returns.
Vedanta aims to strengthen the company’s operational efficiency and unlock shareholder value through this demerger.
Vedanta Stock Split – More Than Just a Corporate Restructuring
Vedanta’s demerger is more than just a corporate restructuring; it signifies how conglomerates contribute to the nation’s economic growth. With surging demand for critical minerals and transition metals, India’s rapid economic expansion and the global shift toward a low-carbon future, Vedanta’s global asset base and agility of a startup will shape India’s industrial future.
Indeed, Vedanta’s restructuring will unlock shareholder value, boost global competitiveness and reduce India’s import dependence in the coming years.
