Nuvama Retains 'Buy' For Vedanta, Expects Demerger To Unlock Value — Check Target Price

Nuvama has reiterated a 'buy' rating on Vedanta with a target price of Rs 686, asserting that the proposed demerger is poised to significantly unlock shareholder value.

This positive stance follows key developments, including the conclusion of the National Company Law Tribunal (NCLT)'s hearing on the demerger proposal. The tribunal has reserved its verdict in the matter.

The brokerage believes the split will create independent and sector-specific entities, which will better reflect their true valuations.

On Wednesday, the Mumbai bench of NCLT wrapped up its hearing in the Vedanta demerger case, after hearing the government's objection to the company's proposal to split itself.

During the hearing, Additional Solicitor General of India Brijender Chahar argued that post the demerger, the resultant company won’t have enough assets to cover government dues.

The counsel representing the Ministry of Petroleum and Natural Gas (MoPnG) cited concerns over the potential financial risks post-demerger of Vedanta and alleged misrepresentation of hydrocarbon assets and insufficient disclosure of liabilities by the metal and mining conglomerate.

The ministry's counsel said that MoPnG 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.

In response, Vedanta's counsel said that the company has already complied with all the required norms.

He also informed the tribunal that Securities and Exchange Board of India (SEBI) has cleared its revised demerger plan after earlier warnings on disclosure and compliance issues, news agency PTI reported.

Meanwhile, a Vedanta spokesperson said, "The company remains committed to the proposed demerger, which aims to create independent, sector-specific entities across aluminium, oil and gas, power, and iron and steel."

Vedanta had filed a scheme of arrangement before NCLT Mumbai bench covering four group companies - Vedanta Aluminium Metal, Talwandi Sabo Power, Malco Energy, and Vedanta Iron and Steel - along with their shareholders and creditors.

The Ministry of Petroleum and Natural Gas had objected to Vedanta's proposed demerger.

Capital markets regulator SEBI had earlier sought details on the proposed base metals carve-out. That particular carve-out is no longer part of the current plan, after Vedanta revised its original blueprint.

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.

With PTI inputs