Vedanta to demerge biz into six firms

With restructuring, Agarwal aims to create independent 'pure play' firms

- Anirudh Laskar

Billionaire Anil Agarwal's Vedanta Group unveiled a complete overhaul of its Indian metals, mining, and energy conglomerate, Vedanta Ltd, involving the demerger of its businesses into six independent companies, with a plan to list five of them by FY25.

With the restructuring, Agarwal aims to create independent "pure play" companies to unlock value by drawing substantial investments for the expansion and growth of these businesses.

Vedanta Ltd said it plans to file for the mandatory Sebi approval in October. The group also renamed Agarwal's main promoter group entity, Volcan Investments Ltd, Vedanta Inc.

Rising interest costs globally, coupled with approximately $2 billion in the group's bonds maturing next year, have intensified the urgency to simplify its complex corporate structure and unlock value to repay debt.

"It appears the demerger decision is driven by the debt concerns at the hold-co level," said Amit Tandon, founder and managing director of proxy advisory firm IIAS.

Buoyed by the announcement, shares of Vedanta Ltd ended 6.82% higher at 222.55 on NSE, while its subsidiary Hindustan Zinc gained 3.59% to 2308.65.

"By demerging our business units, we believe that we will unlock value and potential for faster growth in each vertical," said Anil Agarwal, chairman of Vedanta.