Vedanta’s shareholders and creditors have approved a demerger plan to split the company into five separate entities: Vedanta Limited, Vedanta Aluminium, Talwandi Sabo Power, Vedanta Steel and Iron, and Malco Energy.
The resolution received overwhelming support, with 99.9987% of shareholders, 99.5900% of secured creditors, and 99.9588% of unsecured creditors voting in favor.
Initially, in September 2023, Vedanta proposed a six-entity demerger but revised the plan in early 2025, opting for five entities and retaining the base metals business within the parent company.
Following the announcement, Vedanta’s stock rose 1.99% in intraday trade on the BSE, reaching Rs 442.2 per share. As of 9:46 AM, the share price was up 1.73% at Rs 441.05 per share, while the BSE Sensex was down 0.28% at 75,521.24. Vedanta’s market capitalization stood at Rs 1,72,467.67 crore.
In addition to the demerger, Vedanta Limited’s board has approved raising up to Rs 2,500 crore through the private placement of non-convertible debentures (NCDs). These funds will be raised in one or more tranches, with each debenture having a face value of Rs 1 lakh.
Over the past year, Vedanta’s shares have gained 60%, compared to a 4% increase in the BSE Sensex.
The demerger aims to create independent, sector-focused entities, allowing each to attract specialized investors and strategic partners. This restructuring is expected to streamline operations and enhance efficiency across the distinct business segments.
Vedanta Resources, the UK-based parent company, has been actively managing its debt profile. In November 2024, the company accepted $800 million in bids for two dollar bond issues aimed at refinancing debt maturing in 2028. The bonds offered a 10.25% coupon for three-year and six-month maturities and an 11.25% coupon for seven-year maturities.
These financial maneuvers are part of Vedanta’s broader strategy to optimize its capital structure and focus on core business areas.