Billionaire Anil Agarwal’s ambitious restructuring plan for Vedanta Group has hit a few speed bumps, but the conglomerate remains determined to execute its five-way split within this year. Despite court proceedings and regulatory hurdles, the demerger is being positioned as a transformative step toward sharper business focus, improved governance, and enhanced shareholder value.
Courtroom and Regulatory Crossroads
The National Company Law Appellate Tribunal (NCLAT) has cleared the path for the demerger of Talwandi Sabo Power Ltd (TSPL) from Vedanta Ltd. Attention now shifts to the National Company Law Tribunal (NCLT), which will hear the ministry of petroleum and natural gas’ (MoPNG) objections on 17 September.
MoPNG’s concerns center around recovery of government dues tied to oil and gas contracts, potential non-disclosure of liabilities, and revenue inflation within the demerger scheme. There is also scrutiny over alterations made after initial regulatory approvals.
Vedanta CEO Deshnee Naidoo insists that these are procedural hurdles rather than fundamental roadblocks, emphasizing that shareholders and creditors approved the demerger back in February. “The timelines for demerger are merely moving because of the court cases, but the end milestone is very much in sight for us this year,” she said.
Splitting into Five Businesses
Vedanta plans to split into five listed entities:
- Vedanta Aluminium
- Vedanta Oil & Gas
- Vedanta Power
- Vedanta Iron and Steel
- Restructured Vedanta Ltd (housing Hindustan Zinc, silver assets, and new tech ventures)
The logic behind this move is to allow each business to pursue sector-specific growth while offering investors flexibility and clarity. Naidoo highlighted that post-demerger, all existing investors would automatically hold stakes in each of the new entities.
Debt and Financial Resilience
A critical component of the split is debt management. Vedanta’s net debt fell to ₹53,251 crore in FY25 from ₹58,338 crore a year earlier. The company targets a debt-to-Ebitda ratio of 1x in the near term.
- FY26: debt cut by $0.6 billion (~₹5,286 crore)
- FY27: reduction of $0.7–0.8 billion (~₹6,166–7,047 crore)
Vedanta Resources, the London-based parent, is also aggressively deleveraging, reducing its debt from $9 billion in FY22 to $4.9 billion in FY25.
Investor Scrutiny and Allegations
The group faced sharp criticism from U.S. short-seller Viceroy Research, which alleged that Vedanta Resources siphoned cash from its India-listed unit via outsized dividends. Vedanta dismissed the claims, with legal opinion from former Chief Justice of India D.Y. Chandrachud labeling the report as lacking credibility.
Meanwhile, SEBI issued a cautionary note against modifying the demerger scheme without prior approval. Vedanta insists the letter carries no operational restrictions and has committed to full cooperation.
Expansion Drive
Even as it prepares for the split, Vedanta is on an expansion spree. A $9.5 billion investment program is underway across aluminium, zinc, iron ore, oil, and power. Recently, an additional $1 billion was earmarked for Hindustan Zinc’s capacity expansion to 2 million tonnes.
Aluminium is the centerpiece of Vedanta’s growth. Already India’s largest producer with 50% market share, the company aims to scale capacity from 2.4 MTPA today to 3.1 MTPA by FY28. This will place Vedanta among the world’s top three non-Chinese producers, alongside RUSAL, Rio Tinto, and Alcoa.
Aluminium: The Big Bet
Aluminium’s strategic importance in electric mobility, renewable energy, and infrastructure makes it a natural growth engine. Demand in India is forecast to grow 6–7% annually through 2030, outpacing global averages. Globally, demand could quadruple by 2050, making aluminium the fastest-growing industrial metal.
Vedanta has already invested ₹16,634 crore of its planned ₹29,860 crore aluminium capex, with the balance earmarked for alumina refining, captive bauxite and coal mining, and cost reduction initiatives. With backward integration and refinery expansion, Vedanta aims to cement itself in the top decile of the global cost curve.
The Road Ahead
For Vedanta, the stakes are high. The demerger is not just a corporate restructuring—it is an attempt to realign the group’s future around high-growth, high-demand sectors while improving transparency for investors.
As Ambareesh Baliga, a market analyst, noted: “The expansion plans, decision making and capital allocation will be much sharper. Generally, demergers are wealth accretive for shareholders.”
Whether Agarwal’s grand plan delivers on its promise will depend on navigating regulatory approvals, maintaining investor confidence, and executing expansion seamlessly. But one thing is clear—the conglomerate is betting big on its ability to reshape India’s resource and energy future.
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