NCLT clears Vedanta demerger, paving the way for five sector-focused companies

The National Company Law Tribunal on Tuesday approved Vedanta Ltd’s long-awaited demerger plan, clearing the path for one of India’s largest natural resources groups to split into multiple sector-specific entities. The approval marks a major step in Vedanta’s restructuring strategy aimed at sharper business focus and value creation.

The Mumbai bench of the tribunal, comprising members Charanjeet Singh Gulati and Nilesh Sharma, granted sanction to the company’s demerger scheme, for which the order had been reserved after hearings in November.

Under the approved plan, Vedanta will create five separately listed companies: Vedanta Aluminium, Vedanta Oil and Gas, Vedanta Power, Vedanta Iron and Steel, and a restructured Vedanta Ltd. The parent entity will retain the zinc and silver businesses through Hindustan Zinc and will also function as an incubator for new and emerging ventures.

The demerger, first announced in 2023, is aimed at unlocking shareholder value by allowing each business vertical to operate independently with its own management, strategy, and capital structure. The company believes that sector-focused entities will be better positioned to attract targeted investments, improve operational efficiency, and pursue growth opportunities aligned with their respective industries.

Welcoming the tribunal’s decision, Vedanta said the approval represents a key milestone in its transformation journey. The company noted that it will now move ahead with the required steps to implement the scheme.

The proposal had faced objections from the Ministry of Petroleum and Natural Gas , which raised concerns over potential financial risks, alleged misrepresentation of hydrocarbon assets, and inadequate disclosure of liabilities. The ministry also pointed to a long-pending dispute related to Vedanta’s RJ oil and gas block in Rajasthan, arguing that a substantial portion of the company’s debt was linked to government claims arising from the block and had not been sufficiently disclosed.

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

The NCLT approval was positively received by the market. Following the ruling, Vedanta’s shares touched a 52-week high, pushing the group’s net market valuation to around ₹2.22 lakh crore, reflecting strong investor confidence in the restructuring plan.

The demerger is expected to reshape Vedanta from a diversified conglomerate into a group of focused, independently listed companies, marking one of the most significant corporate restructurings in India’s metals, mining, and energy space.