Demerger of Vedanta's key businesses likely to happen by end of FY25

The demerger of mining conglomerate Vedanta Ltd's key businesses, including aluminium, into separate listed companies is expected by the end of FY25, a top official of the company said on Wednesday.

Vedanta Ltd has filed an application for its demerger scheme before the National Company Law Tribunal (NCLT) after receiving a nod from lenders.

Asked when is the demerger happening, John Slaven, CEO of aluminium business of Vedanta, said, "it's not within our control. It's the NCLT process. They typically take, I don't know, four to six months, to run that process. So by end of this fiscal year, by the end of this fiscal year (I see it happening)."

Slaven was speaking during the launch of Vedanta Aluminum's two new products for power sector.

The first product offers superior electrical conductivity, making it ideal for remelting. The second product is the electrical conductor grade wire rod, designed for winding strip applications with a balance of strength, conductivity, workability, and formability.

Talking further about the demerger, he said, "Well, it's at almost the final phase... So the process that took long time... So we have now filed with NCLT. NCLT are running their process now.

"That culminates in approval sessions with both shareholders and lenders, and then that will enable them to give their final approval. So that's the stage we're at now.

We've kicked into that, that next stage."

The proposed demerger of Vedanta's diverse verticals that represent more than 15 commodities will see the company progress from being asset managers to asset owners, Chairman Anil Agarwal had said in a recent report.

The proposed demerger will create independent companies housing aluminium, oil and gas, power, steel and ferrous materials, and base metals businesses.

The existing zinc and new incubated businesses will remain under Vedanta Ltd.

Vedanta has received approval from 75 per cent of secured creditors for the proposed demerger of its businesses.

The demerger will help in simplifying the company's corporate structure by creating independent businesses. Moreover, it will offer global investors direct investment opportunities in pure-play companies linked to the country's impressive growth.

From FY24 onwards, the company is investing $1.9 billion as growth capex across its businesses.

Vedanta reported a 36.5 per cent rise in consolidated net profit at Rs 3,606 crore for the quarter ended June 2024 due to improved margins and robust cost reduction across all operations.

The company had posted a net profit of Rs 2,640 crore in the year-ago period. Consolidated income in the April-June period rose to Rs 36,698 crore from Rs 34,279 crore in the year-ago period.

Vedanta Ltd, a subsidiary of Vedanta Resources, is a diversified global natural resources company with operations in oil and gas, zinc, lead, silver, copper, iron ore, steel, aluminium and power across India, South Africa and Namibia.