Vedanta expects demerger of units to be completed by December 2024

Mining tycoon Anil Agarwal, said FY25 would be a transformative year.

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Mining conglomerate Vedanta expects demerger of  five of its key businesses, including aluminium, oil and gas, and steel, into separate listed entities, to be completed by December 2024, Chairman Anil Aggarwal said in a letter to stakeholders.

Aggarwal also reiterated the company's target of deleveraging Vedanta Resources by $3-billion in the next three years and achieving an annual Group EBITDA of $7.5 billion within 2 years.

"FY25 will be a transformative year for us on many fronts as we prioritize disciplined growth, operational excellence, and exploring opportunities along the value chain," Aggarwal wrote in the note.

ALSO READ: Vedanta group asks JPMorgan to arrange $300 million India bond

The company's optimism towards the demerger timeline comes days after Fitch Group subsidiary CreditSights raised concerns regarding the proposed demerger.  "For the Jan-2024 and Mar-2025 bondholders whose bonds are secured by shares of VEDL, it is unclear what happens to that collateral after the demerger," CreditSights  wrote in a Vedanta FAQ posted on its website.

"We maintain our view that conducting a restructuring ahead of the demerger would come with its own set of hurdles," the analytics firm added.

"The demerger will promote each company to leverage its own independent strengths and attract targeted investments, ultimately
driving sustainable growth and long-term stakeholder value creation," Aggarwal said.

The Anil Agarwal-led conglomerate has a portfolio of assets among Indian and global companies with metals and minerals - zinc, silver, lead, aluminium, chromium, copper, nickel; oil and gas; a traditional ferrous vertical including iron ore and steel; and power, including coal and renewable energy; and is now foraying into manufacturing of semiconductors and display glass.