Vedanta’s Demerger Expected by March; Anil Agarwal Makes Statement Regarding the Five Companies
Vedanta Ltd, the diversified conglomerate with businesses ranging from oil to metals, is preparing to complete its proposed demerger by March 2026. Following the demerger, the company will be split into five separate, independently listed, and pure-play companies. Company Chairman Anil Agarwal said on Wednesday that all these units have the full potential to grow to the size of the current Vedanta. On Tuesday, the National Company Law Tribunal (NCLT) approved Vedanta’s demerger plan. Under this plan, the base metals business will remain with Vedanta Limited, while the other four listed entities will include Vedanta Aluminium, Talwandi Sabo Power, Vedanta Steel and Iron, and Malco Energy.
Why the Demerger Route Was Chosen
According to reports, Anil Agarwal explained that the demerger route was chosen instead of asset sales or other restructuring options so that all businesses, including zinc, aluminum, oil and gas, power, iron ore, and steel, can grow to their full potential, especially at a time when demand in these sectors is rapidly increasing in India. Comparing Vedanta to a banyan tree, he said, “Vedanta is like a giant banyan tree. Each of its businesses has immense potential, and each can become an independent banyan tree in itself.” Demerger process expected to be completed in the next 3-4 months
Agarwal said that his vision is for each new company to become as large as Vedanta in terms of revenue. In fact, we are creating five new Vedantas, which will benefit our shareholders the most. He stated that the demerger process is expected to be completed in the next 3-4 months, with March 2026 as the final target. After the demerger, existing Vedanta shareholders will receive one share of each newly formed company for every share they currently hold.
Regular dividend payments will continue
Explaining the rationale behind the demerger, Agarwal said that large global resource companies typically operate on a pure-play model, meaning they focus on only one sector. This restructuring of Vedanta is also in line with this international model. Regarding debt, he clarified that the company’s existing debt of approximately ₹48,000 crore will be distributed among the demerged entities based on their cash flow capacity and balance sheet strength, not equally. Each new company will have an independent board and professional management. The promoters’ stake will remain around 50 percent, but they will not be involved in day-to-day operations. Aggressive capital expenditure (capex) and regular dividend payments will continue even after the demerger.
Plan to increase silver production to 3,000 tons
Agarwal also said that he cannot be the chairman of all the new companies. He cited the example of Hindustan Zinc, where he said that independent management under the leadership of his daughter, Priya Agarwal, has yielded better results. Speaking about future plans, he said that Vedanta aims to increase zinc production to become one of the world’s top producers. The plan is also to increase silver production from 700 tons to 3,000 tons to meet domestic demand. Significant expansion will also be undertaken in lead production. In the aluminum sector, the company is working towards doubling its current capacity of 3 million tons. In addition, a large DAP fertilizer plant is being established in Rajasthan. ‘Dividends are in my blood’
Changes in government policies in the oil and gas sector have improved the investment environment. Vedanta aims to achieve a production of 300,000 barrels per day in the near future and increase it to 1 million barrels per day in the next 4-5 years. In the iron ore and steel business, the company will focus on green steel, with a proposed capacity of 10-15 million tonnes. Meanwhile, the power business aims to achieve a capacity of 20,000 megawatts. Emphasizing capex and dividends, Agarwal said that capex is crucial for manufacturing growth in India, and dividends are in his blood – dividends will always be paid.
Expressing confidence regarding debt, he said that Vedanta’s net debt level of ₹48,000 crore is completely manageable and the company is among the least leveraged companies globally. The company will continue to work towards maintaining a strong and balanced balance sheet.
