Vedanta Set for Major Shift: Demerger to Create Independent Companies in Aluminium, Oil, Steel & More, Says Anil Agarwal

Vedanta Ltd is set to change its business approach, moving from managing assets to owning them, according to its Chairman, Anil Agarwal. The company is planning a demerger that will separate its various businesses into independent companies, each focused on specific areas like aluminium, oil and gas, power, steel, and base metals. However, the existing zinc business and newly started ventures will remain with Vedanta Ltd.

Agarwal explained that this change is part of the company’s strategy to expand and strengthen its business model. By shifting from managing assets to owning them, Vedanta aims to become a global leader in each of its sectors.

The demerger process is currently moving forward, as Vedanta has already submitted its plan to the National Company Law Tribunal (NCLT) after receiving approval from 75% of its secured creditors. The company hopes to complete the process by the end of this financial year. The demerger is expected to simplify Vedanta’s structure and create more direct investment opportunities for global investors in these independent businesses, which are aligned with India’s growth.

From the financial year 2024 (FY24) onward, Vedanta is investing $1.9 billion in growth capital across its different businesses.

For the quarter ending on June 30, 2024, Vedanta reported a 36.5% increase in net profit, reaching ₹3,606 crore, compared to ₹2,640 crore during the same period last year. The company’s income also rose to ₹36,698 crore from ₹34,279 crore the previous year, helped by better margins and cost-cutting efforts.

Vedanta Ltd, which is a subsidiary of Vedanta Resources, operates in various sectors like oil and gas, zinc, copper, iron ore, steel, aluminium, and power, with activities in India, South Africa, and Namibia.