Vedanta Ltd, one of India’s largest natural resources conglomerates, has received approval from the National Company Law Tribunal (NCLT) for its long-awaited demerger plan, clearing a major regulatory hurdle that had delayed the restructuring for over two years and signalling a new phase in the company’s corporate evolution.
The core idea behind the demerger is to simplify Vedanta’s sprawling business structure by splitting the conglomerate into multiple independent, sector-focused companies, each with its own balance sheet, leadership team and strategic priorities. This approach is expected to allow each business unit to pursue tailored growth strategies, attract specialised investors, and achieve more accurate valuations in the market rather than being bundled under one diversified umbrella.
Vedanta’s operations have historically spanned a wide range of sectors — from aluminium, oil and gas to power, iron and steel, and base metals — with very different capital requirements and risk profiles. The unified structure previously meant stronger segments often subsidised weaker ones, making performance less transparent and valuation complex. The demerger aims to address these issues by creating separate listed entities that can each unlock their full potential with focused management and capital allocation.
A key driver of the restructuring is also Vedanta’s debt profile. While the group has reduced gross debt significantly over recent years, the absolute level of leverage remained a concern. By splitting the company, liabilities can be ring-fenced more clearly and aligned with the cash-generating assets associated with each vertical, which should help investors and creditors better assess risks and opportunities across units.
Under the approved scheme, the restructured Vedanta Ltd will continue to house parts of the business such as base metals and Hindustan Zinc, while four additional companies focused on aluminium, oil and gas, power, and iron and steel will be carved out as separate listed entities. Shareholders will receive shares in the newly formed companies, providing them direct exposure to each independent business’s growth trajectory.
The immediate market reaction has been positive, with Vedanta’s share price rising following the approval, reflecting investor confidence in unlocking value and improved corporate focus post-demerger. As the company moves forward with the operational steps required to complete the restructuring — including asset transfers, capital realignment and listings of the new entities — the demerger is poised to shape a more disciplined and transparent growth path for Vedanta’s diversified portfolio.
