The demerger date for Vedanta is now set for September 30 instead of March 31. In an exchange filing on Friday, March 28, the Anil Agarwal-led company announced that the deadline had been extended due to pending approvals from the National Company Law Tribunal (NCLT) and other government bodies, expected to be received by April.
If the plan is implemented in September, it will mark the completion of a two-year cycle since its announcement in September 2023, when the proposed scheme was demerging the company's business units into six independent entities to secure big-ticket investments for each newly formed organisation.
By September 2024, Vedanta had already received some key approvals from the Bombay Stock Exchange, the National Stock Exchange, and NCLT. However, a few months later, in December, Vedanta came up with a revised demerger plan to retain the base metal business under the parent company. As a result, the plan shifted from six companies to five: Vedanta Limited, Vedanta Aluminium, Vedanta Oil and Gas, Vedanta Steel and Ferrous Materials, and Vedanta Power.
This updated demerger strategy, designed to facilitate lenders' approvals for the resumption of the Tuticorin copper smelter, was initially set to take effect by January 2025 but later rescheduled to March and now to September 30, awaiting approvals for the new plan.
What's in it for shareholders?
When the revised demerger plan was announced in December, Emkay Global, a prominent India-based financial firm, issued a 'Buy' rating for Vedanta's stocks. Emkay suggested that investing in Vedanta would be ideal for those seeking medium-term returns, with Vedanta Limited, Vedanta Aluminium, and Vedanta Power anticipated to experience balanced growth.
The brokerage also projected significant EBITDA growth for each of Vedanta's entities, expecting Vedanta Limited to log EBITDA growth at a CAGR of 16.5 per cent over FY2024-27, reaching INR 20,850 crore (USD 2.44 million) by FY2026 and Vedanta Aluminium generating INR 22,040 crore (USD 2.58) in FY26E.
How is Vedanta's stock performing now?
Following the news of the demerger plan's rescheduling on Friday, March 28, Vedanta's stock price closed at INR 462.9 (USD 5.41), down by 2 per cent from the previous day's closing of INR 472.35 (USD 5.52). However, on a month-on-month basis, the stock gained 17.26 per cent from INR 394.75 (USD 4.61).
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