Vedanta Demerger: NCLT Green Lights Plan — Details Inside
Vedanta demerger was proposed to streamline operations, improve management focus, and unlock shareholder value.
National Company Law Tribunal on Tuesday approved the Vedanta Ltd. demerger after objection from Ministry of Petroleum and Natural Gas.
The demerger was approved by the board on Sept, 29, 2023.
"The approval marks a key milestone in Vedanta’s transformation into focused, sector-leading companies with clear strategic mandates and dedicated capital structures. The Company will now proceed with the necessary steps to implement the scheme," a spokesperson of Vedanta said on Tuesday.
The delay in receiving approval was majorly due to objections from Ministry of Petroleum and Natural Gas. The ministry had objected due to the potential impact on their ability to recover dues from Vedanta's oil and gas.
The final hearing date for Vedanta's demerger proposal was on Nov. 12.
In addition, SEPCO had some contractual and payment disputes with the company's power business. However, the Chinese (EPC) contractor has now withdrawn all arbitration claims linked to the company's power business.
Initially, the company had outlined a plan to split into six independent entities: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Ltd. The revised scheme, however, retains the base metals business within the parent company.
The demerger was proposed to streamline operations, improve management focus, and unlock shareholder value.
In March 2025, the deadline for completing the demerger was extended to September 30, 2025, due to pending approvals from the NCLT and other government bodies.
The Mumbai bench of the tribunal had postponed the hearing on Sept. 17 till Oct. 8. The NCLT also directed Vedanta as well as the Ministry of Petroleum and Natural Gas (MoPnG) to file written submissions on the matter within five days.
Earlier on Aug. 20, on account of Securities and Exchange Board of India (SEBI) not having completed the scrutiny of the proposal, the hearing was deferred to Sept. 17 by the NCLT.
Apart from this the petroleum ministry had raised certain objections and sought time to present its observations on the scheme in August.
The counsel representing the ministry had raised objections to the demerger seeking details on the RJ block and sought clarifications on disclosures.
The counsel said the ministry also wants disclosures on the concealment of facts that includes showing the exploration blocks as Vedanta's assets and details of the loan taken on the basis of those assets among others.
