Vedanta, a leading natural resources company, has revealed plans to divide their business into six separate listed entities. This move aims to streamline Vedanta’s corporate structure, creating independent sector-focused businesses. Current investors will receive one share in each of the newly listed entities for every share they currently hold in the company.
Chairman Agarwal stated that the demerger will unlock value and potential for faster growth in each vertical. Global investors, including sovereign wealth funds, retail investors, and strategic investors, are expected to benefit from this opportunity.
Vedanta recognizes that while its businesses operate within the larger umbrella of natural resources, each segment has its own unique market, demand, supply trends, and potential for technology deployment to enhance productivity.
The demerger process will require approval from shareholders and regulatory authorities, with completion expected in the fiscal year 2025.
Vedanta Resources, the UK-based parent company of Vedanta Ltd, has faced challenges in raising funds due to rating downgrades and concerns about meeting its debt obligations. To address this issue, Vedanta attempted to reduce its debt burden through a $2.98 billion deal in which Hindustan Zinc, a unit of Vedanta Ltd, would acquire some of the parent group’s zinc assets. However, the Indian government, which owns nearly 30% of Hindustan Zinc, prevented this transaction.
