New Delhi / London: Vedanta Limited, India’s largest diversified natural resources company with a significant global footprint announces its plan to demerge its business units into independent “pure play” companies to unlock value and attract big ticket investment into the expansion and growth of each of the businesses.
Over 90 percent of Vedanta Ltd’s profits are derived in India. Demand for commodities is expected to rise exponentially as the country continues to
build a world class infrastructure and strives to achieve aggressive targets for the
energy transition which is highly mineral intensive.
Once demerged, each independent entity will have greater freedom to grow to its potential and true value via an independent management, capital allocation and niche strategies for growth. It will also give global and Indian investors potential to invest in their preferred vertical, broadening the investor base for Vedanta assets.
In pursuit of this goal, the Vedanta Limited Board approved a pure-play, asset-owner business model that will ultimately result in six separate listed companies, namely: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Limited
For every 1 share of Vedanta Limited, the shareholders will additionally receive 1 share of each of the 5 newly listed companies.
In addition to this, we note today’s announcement from Hindustan Zinc Limited (HZL, a subsidiary of Vedanta Limited), whereby their Board announced a comprehensive review of its corporate structure for unlocking potential value and intention to create separate legal entities for undertaking the Zinc & Lead, Silver and Recycling business of HZL.