As an organization dedicated to supporting the dream of an Atmanirbhar Bharat in natural resources, Vedanta’s demerger will create sector-focused entities, aligned with India’s global leadership goals in critical minerals, energy security as well as renewables and technology sectors. The demerger will help in simplifying Vedanta’s corporate structure by creating independent businesses and will offer global investors direct investment opportunities in pure-play companies linked to India’s impressive growth.

Earlier this month, at Vedanta’s Annual General Meeting, Anil Agarwal, Chairman, Vedanta Ltd. had said, “Demerger of our businesses will lead to the creation of 6 strong companies, each a Vedanta in its own right. This will unlock massive value. Each demerged entity will chart its course but will follow Vedanta’s core values, its enterprising spirit, and global leadership.”

Vedanta’s existing businesses will be structured in the following six independent companies after the demerger:

• Vedanta Aluminium
• Vedanta Oil & Gas
• Vedanta Power
• Vedanta Steel and Ferrous Materials
• Vedanta Base Metals
• Vedanta Limited

The demerger is planned to be a simple vertical split, for every 1 share of Vedanta Limited, the shareholders will additionally receive 1 share of each of the 5 newly listed companies.

Vedanta has a track record of giving strong returns to its shareholders. As of 30 June’24, Vedanta’s total shareholder return over 5 years stood at 276%, while the 5-year average accumulated dividend yield at 65%, delivering significant value for shareholders.

Currently, Vedanta is the Indian subcontinent’s only diversified natural resources company. It has invested over $35 billion in India and is making rapid expansion efforts through 50 strategic growth projects. Vedanta has a unique portfolio of assets among Indian and global companies. It is the sole producer of zinc and silver in India – and amongst the largest in the world. It is India’s largest producer of aluminum and largest private sector producer of oil, along with being one of India’s largest generators of power and purchasers of renewable energy. Also the sole producer of Nickel in India, Vedanta houses various key metals and minerals in its portfolio including chromium, copper, and a traditional ferrous vertical including iron ore and steel.

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The demerger is planned to be a simple vertical split, resulting in six separate listed companies, namely Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Limited. Each independent entity will have greater freedom to grow to its potential and true value via independent management, capital allocation, and niche strategies for growth.

Vedanta has a unique portfolio of assets among Indian and global companies with metals and minerals such as zinc, silver, lead, aluminum, chromium, copper, nickel, oil and gas, traditional ferrous vertical including iron ore and steel, and power, including coal and renewable energy. The company is now foraying into the manufacturing of semiconductors and display glass.

Once demerged, each independent entity will have greater freedom to grow to its potential and true value via independent management, capital allocation, and niche strategies for growth. It will also give global and Indian investors the potential to invest in their preferred vertical, broadening the investor base for Vedanta assets.

Vedanta Limited will remain an exciting incubator for new businesses, including Vedanta’s technology verticals buttressed by the strong financial earnings of the Tier-one Hindustan Zinc assets. The company will provide investors with the opportunity to invest in some of the world’s leading zinc production assets with a clear capital allocation policy while benefiting from these nascent technology companies until they too are ready to be released as independent, globally significant businesses.

The announcement comes at a time when India is forecast to be the fastest-growing major economy for the next several years. More than ninety 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. The Government of India’s emphasis on self-reliance will provide avenues for rapid growth for Indian companies in the commodities space.

Vedanta Limited is committed to best-in-class ESG practices and has a strong focus on metals critical for the transition to a green economy. The company has pledged Rs 5000 crore over the next five years on various social impact programs and its flagship project, Nand Ghar, is setting up model anganwadis across India. Vedanta Ltd. has been listed in the Dow Jones Sustainability World Index 2022, conferred the Golden Peacock Award for excellence in Corporate Governance 2022, and certified as a Great Place to Work 2023. Vedanta Limited is listed on the Bombay Stock Exchange and the National Stock Exchange.

The demergers will be conducted through a scheme process, and filing with stock exchanges for SEBI approval is expected in October 2023. The company will follow the customary process as per Indian law.

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