The National Company Law Tribunal on Tuesday approved Vedanta’s long-pending demerger scheme, clearing the way for the group to split into multiple sector-focused companies spanning aluminium, oil and gas, power, and iron and steel.
“The sanction to the company scheme is granted,” the Mumbai bench of the tribunal, comprising Charanjeet Singh Gulati and Nilesh Sharma, said while pronouncing the order. The tribunal had reserved its decision after concluding hearings in November.
Market reaction
Following the news, the company’s shares rose 4.20% to close at Rs 572.50 on NSE.
Vedanta welcomed the ruling, calling it a significant step in its corporate restructuring exercise. “The approval marks a key milestone in Vedanta’s transformation into focused, sector-leading companies with clear strategic mandates and dedicated capital structures. The company will now proceed with the necessary steps to implement the scheme,” a company spokesperson said.
Context of the clearance
The clearance comes despite objections raised by the ministry of petroleum and natural gas, which had opposed the demerger citing concerns over financial risks, alleged misrepresentation of hydrocarbon assets, and inadequate disclosure of liabilities. The ministry had flagged what it described as concealment of facts, including the depiction of exploration blocks as Vedanta’s assets and loans raised against those assets.
In its submissions, the ministry referred to a long-running dispute related to Vedanta’s RJ oil and gas block in Rajasthan, arguing that a substantial part of the company’s debt stemmed from government claims linked to the block. It contended that these liabilities had not been sufficiently disclosed in the proposed demerger scheme.
Vedanta, however, maintained that it had complied with all applicable regulatory and disclosure requirements. The company told the tribunal that the proposed restructuring was aimed at creating independent, sector-specific entities and that the scheme was fully aligned with existing regulations.
The company also informed the tribunal that it had already received approval from the Securities and Exchange Board of India after revising the demerger plan in line with regulatory feedback.
The Anil Agarwal-led Vedanta Group had announced the demerger proposal in 2023, outlining plans to split its Indian operations into five separately listed companies: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron and Steel, and a restructured Vedanta entity. Under the plan, the parent company will retain the zinc and silver businesses through Hindustan Zinc and function as an incubator for new businesses.