Anil Agarwal-led Vedanta has announced the demerger of its real estate business into Vedanta Property Platforms as the company aims to unlock the value of these assets, the board declared at a meeting on Thursday. As of March 31, the turnover of its demerged undertaking stood at Rs 1.26 crore, reflecting a stake of 0.001% of Vedanta’s standalone turnover.
The demerger comes within three months of the market debut of Vedanta’s four new independent entities: Vedanta Aluminium Metal, Vedanta Power, Vedanta Oil & Gas, and Vedanta Iron & Steel.
“The proposed demerger will enable to unlock value out of these surplus assets,” the company said in its regulatory filing.
How many shares will investors get?
An investor holding 20 shares of Vedanta will receive 1 share of VPPL, and the demerger is planned to be a vertical split, the company said.
“The surplus real estate portfolio to be demerged comprises of ~ 2,200 acres of industrial land and ~ 55,000 sq feet for residential/ commercial properties,” Vedanta said in its exchange filing.
Speaking over the demerger, Anil Agarwal, Chairman of Vedanta Group, said: “This is yet another exciting announcement from Vedanta. After the recent success of the five-way demerger creating “pure-play” entities across oil and gas, aluminium, power, and steel, we plan to demerge the surplus real estate assets into an independent “pure-play” company to unlock significant value for the stakeholders.”
Vedanta: Why demerge the real-estate business?
Vedanta said that its currently merged real-estate entity has been historically subjected to limited focused utilisation, resulting in bounded visibility and segment realisation.
“To enable focused management, improved transparency, and a more productive deployment of such real estate, the Demerged Company has initiated steps to contribute and consolidate its real estate undertaking as part of the Scheme,” Vedanta added.
Additionally, the conglomerate’s various other enterprises hold real-estate assets, which would need a focused approach to its real-estate portfolio management, over which the company decided to demerge the said entity.
The Mumbai-based firm noted that the management of the demerged company is considering establishing the real estate business of the demerged company into a separate focused entity in order to create a pure-play real estate platform.
No change in shareholding pattern
Vedanta clarified that post-demerger will be no change in the shareholding pattern of the company.
Vedanta share price
Vedanta ended Thursday’s trade on NSE at Rs 267.50, up 1% from its previous close. Over the past one month, its share price has fallen nearly 6%, while over the past six months it has declined by a whopping 64%.