Ahead of the crucial creditor meeting, Vedanta’s share price slipped 1.25% in intraday, trading at Rs 409.80 per share. Mining conglomerate Vedanta creditors are set to vote on the demerger plan today, splitting itself into five separate businesses.
The company had officially announced the meeting through an exchange filing on February 13.
Why is Vedanta splitting up?
The demerger plan of Vedanta was approved by the board on September, 2023 as a part to streamline operations and maximise shareholder value.
By separating its diverse businesses, the company is planning to create independent entities that will focus on their respective industries without being tied to the larger conglomerate.
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Although at the initial phase, the company proposed as a six-way split, but later the conglomerate revised its demerger plan to create five distinct entities which include
Vedanta Aluminium
Vedanta Oil & Gas
Vedanta Power
Vedanta Steel and Ferrous Materials
Vedanta (the existing entity)
What this means for shareholders
For investors holding Vedanta shares, the demerger will bring a significant shift. Every shareholder will receive one share in each of the four newly formed companies for every share they own in Vedanta.
This will significantly give the investors more exposure to the five focuses businesses at no extra cost.
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For the demerger, the company needs approval from both secured and unsecured lenders. At least 75% of creditors, based on the debt value, must vote in favor of the plan. With no-objection certificates already secured from the BSE and NSE, the company now awaits the green light from its lenders.
Vedanta stock performance
With a market capitalisation of Rs 1.60 lakh crore, Vedanta’s 52-week high stands at Rs 526.96 per share, while its 52-week low is Rs 249.50.
In the past five days, the Vedanta share price has dropped nearly 2%. Over the last month, the share price of the company has tumbled nearly 11% as per the latest update.
Looking at a broader timeframe, in the past six months,
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