NCLT approves Vedanta demerger plan, paving way to split group into sector-focused entities

Mumbai: The National Company Law Tribunal (NCLT) on Tuesday approved Vedanta’s demerger scheme, clearing the way for the group’s restructuring into sector-focused entities spanning aluminium, oil and gas, power, and iron and steel.

“The sanction to the company scheme is granted,” the Mumbai bench of the tribunal, comprising Charanjeet Singh Gulati and Nilesh Sharma, said. The order was reserved after hearings concluded in November.

Vedanta welcomed the approval, calling it a major step in its transformation. “The approval marks a key milestone in Vedanta’s journey towards creating focused, sector-leading companies with distinct strategic priorities and capital structures. The company will now take the necessary steps to implement the scheme,” a spokesperson said.

The Ministry of Petroleum and Natural Gas had opposed the demerger, citing concerns over financial risks, alleged misrepresentation of hydrocarbon assets, and inadequate disclosure of liabilities. It also flagged a long-running dispute related to Vedanta’s Rajasthan oil and gas block, arguing that associated government claims and debt exposures were not sufficiently disclosed.

Vedanta, however, maintained that it had complied with all regulatory requirements and informed the tribunal that it had already secured approval from the Securities and Exchange Board of India after revising the scheme.

Announced in 2023, the demerger will split Vedanta’s Indian operations into five separately listed entities—Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron and Steel, and a restructured Vedanta. The parent company will retain zinc and silver assets through Hindustan Zinc and serve as an incubator for new businesses.

Following the NCLT approval, Vedanta shares rose sharply, gaining nearly 4 per cent to close at Rs 569.35 on the BSE, taking the company’s market capitalisation to about Rs 2.23 lakh crore.