Vedanta expects demerger to complete in six months by June-July

New Delhi: Diversified natural resources company Vedanta Ltd has pushed back its demerger by a quarter to June-July, a senior official said on Friday. Speaking with PTI, Vedanta's Chief Financial Officer Ajay Goel said that the demerger is in the last stage and the company sees it completed in the month of June-July. "We see the whole transaction culminating around...June-July. It would be six months from now," he said.

The company had earlier said that the demerger was expected to be completed by the end of FY25. Vedanta Ltd shareholders and creditors will meet next month to decide on the proposed demerger of the company. The approval of the demerger proposal will pave the way for the company's various business verticals to become separate entities. The mining firm last month revised its demerger plan and decided to retain its base metal undertaking within the parent firm.

Vedanta had earlier said post-demerger its existing businesses will be structured in six independent companies -- Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Ltd. However, later it revised the plan. Vedanta had also said that the decision was taken following deliberations with stakeholders, including lenders, regarding the scheme and approval by the board of directors. It also stressed the ongoing search for alternative avenues for restarting the copper business in Thoothukudi, Tamil Nadu, an integral part of the base metals undertaking, as the reason behind the development. The non-implementation of the demerger of the base metals undertaking and its retention in Vedanta will not impact the overall value creation for shareholders, it said.

Vedanta Chairman Anil Agarwal had earlier said the proposed demerger of the company's diverse verticals, which represent more than 15 commodities, will see it progress from asset managers to asset owners. As the company passes through the transition phase, Vedanta is focusing on consolidating and strengthening its asset base to emerge as a world leader in each of its verticals, the chairman had said. After receiving a nod from lenders, the diversified natural resources company moved to the NCLT, seeking a demerger and had expressed hopes of completing the process by the end of this fiscal year.

The demerger will help simplify the company's corporate structure by creating independent businesses. Moreover, it will offer global investors direct investment opportunities in pure-play companies linked to the country's impressive growth. The demerger will allow the individual units to pursue strategic agendas more freely and better align with customers, investment cycles, and end markets. From FY24 onwards, the company has been investing $1.9 billion in growth capex across its businesses.