Vedanta surges 5% in 2 days after NCLT approves demerger; brokerages upbeat

Brokerages believe Vedanta's demerger represents a value unlocking event with high growth Aluminium and Power business expected to command better valuations.

Vedanta share price today

 

Share price of Vedanta hit a new high of ₹579.95, gaining 2 per cent on the BSE in Wednesday’s intra-day trade. In the past two trading days, the stock price of the metal company has rallied 5 per cent after it informed the exchanges that the National Company Law of Tribunal (NCLT) approved the company’s demerger scheme. 

 

Shares of Vedanta were quoting higher for the seventh straight day, soaring 13 per cent during the period. Thus far in the calendar year 2025, Vedanta has outperformed the market by soaring 31 per cent. In comparison, the BSE Sensex and the BSE Metal index were up 8 per cent and 21 per cent, respectively.

 

At 09:24 AM; Vedanta was quoting 1.4 per cent higher at ₹577.20, as against 0.16 per cent gain in the BSE Sensex. A combined nearly 6 million equity shares changed hands on the NSE and BSE.

 

NCLT Mumbai approves demerger of Vedanta into five distinct entities

 

The Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday gave its approval to Vedanta Limited’s demerger proposal, clearing the way for the group to reorganise its operations into five distinct, sector-specific entities.

 

The plan involves the demerger of its five business units, including Aluminium, Power, Oil & Gas, and Steel & Ferrous. The scheme will be executed as a simple vertical split, wherein for every one share of Vedanta held, shareholders will receive one share in each of the four newly formed entities.  CATCH STOCK MARKET LIVE UPDATES TODAY 

Brokerages view on Vedanta

 

This is a positive development for the company, as the demerger represents a value unlocking event. The high growth Aluminium and Power business is expected to command better valuations compared to the current conglomerate structure, ICICI Securities said in a note.

 

The demerger scheme is targeted for completion by March’26. With this, the brokerage firm remains positive on Vedanta due to its strategic capacity expansion amid healthy demand for Aluminium and Zinc, due to its incremental application in automobile and renewable spaces, higher focus on value added products, improving operating efficiencies, and capital-efficient operation.

 

In a recent company report, ICICI Securities said they remain positive on Vedanta given the robust non-ferrous prices, strategic expansion at aluminium and zinc India, controlled leverage on B/S, return ratios >20 per cent, attractive dividend yield of 6 per cent. The brokerage firm retained its 'BUY' rating on Vedanta with SOTP based revised target price of ₹650.

 

One positive is that new ventures shall be clubbed under one company, Vedanta, which removes ambiguity of owning other commodity companies. This will help in unlocking value by improving valuation of companies such as aluminium, steel and power. Analysts at Nuvama Institutional Equities estimate a fair value of ₹686 (ceteris paribus) shall be enhanced by ₹84/share once the demerger comes into effect.

 

Meanwhile, according to India Ratings and Research (Ind-Ra), Vedanta's EBITDA is likely to improve over FY26-FY27, supported by likely incremental volume growth from the ongoing capex, a likely cost reduction and stable commodity prices, with progress towards deleveraging to around 2x.

 

Ind-Ra expects the group to achieve consolidated EBITDA (excluding brand fees) of around ₹45,000 crore-₹50,000 crore over FY26-FY27 owing to an increase in volumes from the added capacities, increased backward integration through increased coal linkages, and cost efficiencies in the aluminium and zinc businesses. The consolidated profitability is likely to be supported by healthy domestic demand over the medium term, along with higher commodity spreads.