Vedanta Extends Deadline For Demerger Approvals To September
The decision was made as approvals from the NCLT and certain government authorities are still pending.
Vedanta Ltd. has extended the deadline for securing necessary approvals for its planned demerger from March 31 to Sept. 30, according to an exchange filing on Friday. The decision was made as key approvals, including those from the National Company Law Tribunal and certain government authorities, are still pending.
The company’s board, along with the boards of its resulting entities, exercised their powers under Clause 39.7 of the demerger scheme to extend the timeline. The clause allows the parties involved to push back the implementation date if conditions precedent are not met within the original timeframe.
If approvals are not secured by the new deadline, the relevant part of the scheme may become void, while other parts could still remain valid.
Vedanta’s demerger plan, first announced in September 2023, involves splitting the company into independent listed entities focused on aluminium, oil and gas, power, and base metals. The move is aimed at enhancing operational efficiency, streamlining management, and unlocking shareholder value.
The company has already received approval from its equity shareholders and creditors for the restructuring. As part of the plan, shareholders will be allotted one share in each of the newly formed entities, with no change to the overall shareholding structure.
The demerger has been in the works for several months, with the company stating that separating its businesses will allow each entity to focus on its core operations and attract sector-specific investors. However, regulatory delays, particularly in securing NCLT approval, have slowed down the process.
Shares of the company closed 1.89% lower at Rs 463.4 per share, compared to a 0.31% decline in the NSE Nifty 50. It has fallen 70.59% in the last 12 months and 4.26% on a year-to-date basis.
Nine out of the 15 analysts tracking Vedanta have a 'buy' rating on the stock, five recommend a 'hold' and one suggests a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 522.62, implying an upside of 12.8%.
