Key Points:
- Vedanta demerger approval allows zinc and silver to remain with the parent company while four new entities are listed.
- Government objections were rejected, though future regulatory or legal action remains possible.
- Shareholders will receive one share in each new company for every Vedanta share held, pending final clearances.
India’s company law tribunal on Tuesday granted Vedanta demerger approval, allowing Vedanta Ltd.’s plan to demerge its Indian operations into five listed entities, clearing a major restructuring step while setting conditions and leaving room for future regulatory or legal action.
The National Company Law Tribunal’s Mumbai bench said the demerger scheme was “fair and reasonable,” complied with statutory requirements and did not violate public policy, according to the order approving the restructuring.
The Vedanta demerger approval allows the company to separate its businesses into separate listed companies while retaining zinc and silver operations at the parent level. The order comes as Vedanta’s shares have gained about 10% over the past month, drawing investor attention to the company’s next steps.
Tribunal Upholds Plan, Rejects Government Objections
The tribunal rejected objections raised by the Ministry of Petroleum and Natural Gas, which had alleged misrepresentation of hydrocarbon assets and incomplete disclosure of liabilities. The bench said the concerns did not warrant blocking the scheme and that required disclosures had been made.
In its order, the tribunal said the plan “is not violative of any provision of law,” adding that all procedural and statutory conditions for Vedanta demerger approval had been satisfied.
At the same time, the bench clarified that its approval does not bar ongoing or future litigation, regulatory proceedings, tax actions or arbitration involving the company or its units.
Vedanta said in a regulatory filing that it welcomed the order and would proceed with the remaining steps required to make the demerger effective.
Shareholders to Get Four New Shares After Split
Under the approved structure, Vedanta will continue as the parent company and retain zinc and silver operations through Hindustan Zinc. The remaining businesses will be carved out into four separately listed companies: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, and Vedanta Iron and Steel.
Shareholders of Vedanta will receive one share in each of the four new entities for every share held in the parent company. The structure is designed to preserve proportional ownership across the group following the split.
The company had earlier proposed creating six independent entities, including a base metals unit. In the revised scheme approved by the tribunal, the base metals business remains with the parent, which will also act as an incubator for future ventures.
Vedanta said the streamlined structure would allow each listed company to focus on its core sector, improve operational efficiency and provide clearer visibility to investors.
Stock Rises as Company Awaits Final Clearances
While the tribunal has approved the scheme, Vedanta must complete several conditions before the demerger becomes effective or within two months of the order, the tribunal said. These include releasing charges over fixed assets and updating related disclosures with the Registrar of Companies.
The bench emphasized that the Vedanta demerger approval should not be interpreted as immunity from regulatory scrutiny or enforcement actions by authorities.
Vedanta shares have been volatile this year but have posted strong recent gains. The stock is up about 29% in 2025 so far, according to exchange data. Over the past fifty-two weeks, shares have traded between a high of Rs 572.90 and a low of Rs 363.
Following the Vedanta demerger approval, Investors are now watching timelines for regulatory filings, record dates and listings of the new entities, which will determine how quickly the demerger translates into tradable shares.
Visit Business Viewpoint Magazine to read more.
