Anil Agarwal-led metals and mining behemoth Vedanta’s de-merger scheme has come to a halt. This is because NCLT canceled it on account of an undisclosed liability by Vedanta Base Metals and its full value is yet to be uncloked. However, Axis Securities is positive on the demerger plans and expects it to be over in the second half of next financial year.
According to the report by Axis Securities, “we continue to see value unlocking post demerger especially from the Aluminium business. Going forward, the company will go for the 2nd motion of NLCT approval along with other statutory approvals and parallelly work towards mining leases and other assets transfers to the demerged entities. The entire demerger process is expected to be completed in H2FY26.”
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Vedanta demerger aims to simplify the corporate structure, provide investment choices, align strategies with markets, and unlock value across assets. The brokerage expects the demerger process to be finalized in H2 FY26.
In 2023, Vedanta’s board approved the de-merger into six different listed entities, which are Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta.
How the Vedanta demerger can help unlock value
As per Axis Securities’ assumptions for debt split across demerged entities, “70% of the Ved Ltd standalone debt has been assigned to the demerged Aluminium business, 10% to O&G, 3% to Steel and Ferrous, 2% to Power and the remaining 15% to the residual Ved Ltd.”
Similarly for cash and CE they have assigned “20% cash towards the demerged Aluminum business, 10% towards Oil & Gas, 3% towards Steel and Ferrous, 2% to Power, and the remaining 65% towards the residual Ved Ltd.”
According to the, “both VEDL and its parent Ved Rcs have primary focus on deleveraging the balance sheet. Vedanta Resources (Parent) has de-leveraged by $4+ Billion in the last 2.5 years, and debt as of Jan’25 stands at $4.9 billion. It has plans to de-lever by $3 billion in the next three years Vs the FY24 debt level of $5.8 billion. It has already achieved $1 billion of debt reduction. Group Net Debt/EBITDA is currently at 2.3x,
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