22-Jun-2024Today's Market Indicators

Vedanta to demerge its business units into six listed entities
(15:13, 30 Sep 2023)

The demerger will result in the formation of six separate companies, and each will be listed, said the company.

The six independent listed entities are, Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta.

The de-merger is planned to be a simple vertical split, for every one share of Vedanta, the shareholders will additionally receive 1 share of each of the five newly listed companies.

Explaining the rationale, Vedanta said that the move is aimed at simplifying its corporate structure with sector-focused indepdendent businesses and provides an opportunity to global investors, including sovereign wealth funds, retail investors and strategic investors.

With listed equity and self-driven management teams, these demergers provide a platform for individual units to pursue strategic agendas more freely and better align with customers, investment cycles and end markets, it added.

Subject to approvals, the entire process is expected to be completed in FY25.

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

Once demerged, each independent entity will have greater freedom to grow to its potential and true value via an independent management, capital allocation and niche strategies for growth, the company added.

Anil Agarwal, chairman of Vedanta, stated, ?By demerging our business units, we believe that will unlock value and potential for faster growth in each vertical. While they all come under the larger umbrella of natural resources, each has its own market, demand and supply trends, and potential to deploy technology to raise productivity.

In line with Vedanta's ethos, each company will continue to retain a strong commitment to the well-being of our workforce, our communities and our planet. Even as we move to new ways of running our businesses, we will remain steadfast to transform for good.?

Vedanta, a subsidiary of Vedanta Resources, is one of the world's leading oil & gas and metals company with significant operations in oil & gas, zinc, lead, silver, copper, iron ore, steel, and aluminium & power across India, South Africa and Namibia.

On consolidated basis, the miner's net profit tumbled 40.8% to Rs 3,308 crore in Q1 FY24 on 12.8% decline in revenue from operations to Rs 33,342 crore in Q1 FY24 over Q1 FY23.

Shares of Vedanta surged 6.84% to close at Rs 222.50 on on Friday, 29 September 2023.

The stock market will remain closed on Monday, 2 October 2023 on account of Mahatma Gandhi Jayanti.

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