NCLT Mumbai approves Vedanta demerger plan, shares rise 4%

NCLT approves Vedanta demerger plan, shares rise 3.5%

The Mumbai bench of National Company Law Tribunal (NCLT) approved Vedanta demerger plan on December 16, following which the metals and mining conglomerate's shares rose 4%. A detailed order is awaited.

"The sanction to the company scheme is granted," the Mumbai bench of the tribunal, composed of Charanjeet Singh Gulati and Nilesh Sharma, said.

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.

On December 16, Vedanta shares on NSE closed trading 4% higher at Rs 572.5 apiece.

"We welcome order pronounced today by NCLT sanctioning the company’s demerger scheme, the approval marks key milestone in company’s transformation into focused, sector-leading companies. Company will now proceed with the necessary steps to implement the scheme," said Vedanta in a statement.

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.

Mehraboon J Irani, a market expert, told CNBC-TV18, "There will certainly be value unlocking post the demerger. Certain assets held by Vedanta rank higher than most other players in the industry."

The demerger was proposed to streamline operations, improve management focus, and unlock shareholder value.

NCLT Mumbai reserved judgment in Vedanta petition seeking nod for demerger on November 12. Government had opposed plea for Vedanta demerger and said it has pending claims of Rs 16,700 crore.

The government also flagged concerns over inflated revenue and concealed liabilities of the company. In its response, Vedanta had said it will issue a corporate guarantee in favour of the petroleum and natural gas ministry "once the (demerger) scheme becomes effective".

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 Securities and Exchange Board of India, which had earlier issued a warning letter to Vedanta about its demerger proposal, has approved the demerger scheme, the regulator had told the tribunal in October.

So far in 2025, Vedanta's stock rose 27% as against 21% rise in Nifty Metal index.

The parent entity would retain the zinc and silver businesses through Hindustan Zinc and act as an incubator for new ventures.

Vedanta's consolidated borrowings stood at Rs 25,938 crore at the end of September.