Vedanta's Demerger Plan Secures Shareholder and Creditor Approval, Reports Indicate

Vedanta Limited’s proposed demerger has received approval from its shareholders, secured creditors, and unsecured creditors in meetings held on Tuesday, February 18. The company’s restructuring plan involves splitting Vedanta into independent entities, aiming to enhance operational focus and unlock shareholder value.

As of 11:00 AM IST, Vedanta Share Price was at ₹424.65, up 1.54% from its previous close.

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Details of the Demerger Plan

Under the approved scheme of arrangement, Vedanta Limited will be separated into four distinct entities:

• Vedanta Aluminium Metal Limited
• Talwandi Sabo Power Limited
• Malco Energy Limited
• Vedanta Iron and Steel Limited
   

The move is expected to improve efficiency in Vedanta’s diverse business verticals, enabling each entity to function independently and cater to specific market needs.

Creditor and Shareholder Approval

Vedanta secured an 83% approval from creditors, exceeding the required 75% threshold, ensuring the demerger plan could move forward. The company also obtained shareholder approval through virtual meetings and an electronic voting process.

Voting Process and Meeting Details

• The equity shareholders' meeting, chaired by Independent Director Dindayal Jalan, was held virtually at 10:00 am. Shareholders were given the option to vote remotely between February 13 and February 17, followed by live e-voting during the meeting.
• The secured creditors' meeting took place at 11:45 am, followed by the unsecured creditors' meeting at 1:30 pm. A similar electronic voting process was conducted for these meetings.
   

Strategic Reasons for the Demerger

Vedanta first announced its demerger plan in 2023, with an initial proposal to separate its aluminium, oil & gas, power, steel & ferrous materials, base metals, and the existing listed entity into independent units.

However, in December 2024, Vedanta revised its strategy, choosing to exclude the base metals business from the demerger. The decision was influenced by ongoing efforts to explore alternative solutions for restarting the non-operational Tuticorin copper smelter, which remains a key asset for the company.

Impact on Shareholders

As part of the demerger process, Vedanta shareholders will receive one share of each newly created entity for every share they hold in Vedanta Limited as of the record date. This allocation ensures that existing investors continue to benefit from the growth of the newly formed businesses while allowing each entity to establish its market position independently.

Future Outlook

The demerger is expected to create better transparency, improved capital allocation, and higher investor confidence. With independent governance structures and specialized leadership for each business segment, Vedanta aims to enhance efficiency and competitiveness across its diverse sectors.

By implementing this strategic separation, Vedanta seeks to unlock value for shareholders and drive long-term growth in its core industries.