Vedanta to Seek Final Shareholders’ & Creditors’ Approval for Demerger on Feb 18

• Meeting of equity shareholders, secured and unsecured creditors to be held on February 18.
• Demerger to result in five companies focused on aluminum, power, oil and gas, steel & ferrous, and other existing businesses under Vedanta Limited.

Bengaluru, 20th January, 2025: Vedanta Ltd. said in an exchange notification that it will conduct meetings of its equity shareholders and secured and unsecured creditors on February 18 to seek their approval on the proposed demerger.

The demerger aims to create five separate entities focused on aluminum, power, oil and gas, steel and ferrous, and certain existing businesses under Vedanta Ltd. As per Vedanta’s earlier exchange filing, the proposed demerger will simplify Vedanta’s corporate structure by creating sector-focused independent businesses, providing global investors, sovereign wealth funds, retail investors, and strategic investors, with direct investment opportunities in dedicated pure-play companies.

Vedanta said in September 2023 that the demerger would provide a platform for individual units to pursue strategic agendas more freely and better align with customers, investment cycles, and end markets. It will help unlock value and provide the potential for faster growth in each vertical. Each company will have its own market, demand, and supply trends and the potential to deploy technology to raise productivity. At the same time, the new companies will remain committed to achieving net-zero carbon emissions by 2050 and net water positivity by 2030, the company said.

In November, the Mumbai Bench of the National Company Law Tribunal cleared the way for the meetings of Vedanta’s equity shareholders, secured and unsecured creditors. Vedanta has already received a go-ahead/no objection from the stock exchanges.

Research firms and brokerage houses have expressed confidence in Vedanta’s demerger, seeing it as a chance of rerating. Emkay Research said in its December report on the mining sector that it believes that “Vedanta’s proposed demerger… focusing on the exposed commodity would open up a case for re-rating, as the investors would take exposure based on the outlook for that particular commodity and the business fundamentals without taking exposure to other commodities that come attached as part of the diversified group.” The brokerage sees a significant upside in Vedanta based on the expected valuation premium that pure plays get over diversified miners.

The share price of Vedanta Ltd. (VEDL) rose by 72% in the last year (2024).

Earlier this week, Vedanta Resources Limited (VRL), the parent company of Vedanta Ltd.  raised $1.1bn through new bond issuances. It had garnered strong investor demand with the bonds receiving final orders of $3.4bn+ representing an oversubscription of 3.1x. VRL has refinanced $3.1bn in USD bonds since September 2024 through four successive international bond transactions.

These transactions have repriced Vedanta Resource’s curve and reflect strong demand from international bond investors, including numerous marquee investors. The total quantum of USD bonds raised by VRL marks the largest amount raised by an Indian issuer over the last three years. VRL’s credit ratings have also been upgraded by multiple notches since its return to capital markets in 2024, to reflect the company’s improving liquidity, capital structure and longer debt maturity profile.