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Vedanta Limited has received approval from the National Company Law Tribunal (NCLT), Mumbai bench, for its demerger scheme, allowing the company to proceed with splitting its businesses into separate listed entities. The approval comes after months of regulatory scrutiny and objections raised by government departments and regulators over disclosures and liabilities. With the tribunal clearing the scheme, Vedanta can now move ahead with restructuring its diversified operations into focused companies across metals, power, oil and gas, and steel, a move aimed at simplifying its corporate structure.
Vedanta Limited has secured a key legal clearance after the National Company Law Tribunal (NCLT), Mumbai bench, approved its proposed demerger scheme. This approval enables the natural resources major to move forward with its plan to separate its diverse businesses into independent listed companies, ending a period of regulatory uncertainty that had delayed the restructuring process. Advertisement
The demerger plan, first announced in 2023, faced objections from various authorities, including the Ministry of Petroleum and Natural Gas, which had raised concerns related to disclosures, asset ownership and inter-company liabilities, particularly in the oil and gas business. Market regulator SEBI had also sought additional clarity on compliance-related matters. The tribunal reviewed these issues during multiple hearings before reserving its order.
In its ruling, the NCLT observed that Vedanta had complied with the requirements under company law and addressed the concerns raised by regulatory authorities. The tribunal noted that the scheme had received the required approvals from shareholders and creditors through court-mandated meetings. It also stated that no material legal violation was found that would prevent the demerger from being implemented.
As per the approved structure, Vedanta will reorganise its Indian operations into five separate listed entities. These will include businesses focused on aluminium, oil and gas, power, iron and steel, and a residual entity that will continue to house zinc, lead, silver and other assets. Each company will operate independently with its own balance sheet and management, while existing shareholders of Vedanta will receive proportionate shareholdings in the new entities.
The demerger is expected to simplify the group's complex holding structure and provide clearer visibility into the performance of individual businesses. Vedanta has previously stated that the move would allow each entity to pursue its own growth strategy and access capital markets more efficiently, though the company has not given a fixed timeline for the listing of all the new entities.
Following the tribunal's approval, Vedanta's shares moved higher, reflecting investor relief after a prolonged approval process. The company is now expected to complete the remaining procedural and regulatory steps required to give effect to the scheme, including filings with stock exchanges and other statutory authorities.
Source PTI
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