Vedanta Limited announced a demerger of diversified businesses unlocking significant value to create world-class sector-leading companies driving the next phase of growth. The demerger will result in six separate listed companies.
Sep 29, 2023
Recently, Vedanta Limited announced a demerger that will help the company capitalize on India and the world’s growing demand for commodities, energy, and technology. The announcement was made to demerge its business units into independent “pure play” companies to unlock value and attract big-ticket investment into the expansion and growth of each of the businesses. Vedanta Limited board approved a pure-play, asset-owner business model that will ultimately result in six separate listed companies, namely: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Limited. The de-merger is planned to be a simple vertical split, for every 1 share of Vedanta Limited, the shareholders will additionally receive 1 share of each of the 5 newly listed companies.
The de-merger will simplify Vedanta’s corporate structure with sector-focused independent businesses, and provide opportunities to global investors, including sovereign wealth funds, retail investors, and strategic investors, with direct investment opportunities in dedicated pure-play companies linked to India’s remarkable growth story through Vedanta’s world-class assets. Additionally, with listed equity and self-driven management teams, these demergers provide a platform for individual units to pursue strategic agendas more freely and better align with customers, investment cycles, and end markets. It also enables Vedanta to better highlight, and for the market to more easily value, the remarkable technological advances, environmental stewardship, and robust growth stories within Vedanta’s family of companies.
Anil Agarwal, Chairman of Vedanta, stated: “This is an exciting announcement for Vedanta, and India. Our country is on an unprecedented growth trajectory which will make us the third largest economy in the world before the end of this decade. The demand for minerals, metals, oil and gas and power is going to grow very rapidly and Vedanta’s businesses are uniquely positioned to service this rising demand and reduce reliance on imports. Vedanta is also foraying into semiconductors and display glass which are of great strategic significance to India. By demerging our business units, we believe that will unlock value and potential for faster growth in each vertical. While they all come under the larger umbrella of natural resources, each has its own market, demand and supply trends, and potential to deploy technology to raise productivity. In line with Vedanta’s ethos, each company will continue to retain a strong commitment to the well-being of our workforce, our communities and our planet. Even as we move to new ways of running our businesses, we will remain steadfast to transform for good.”
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The new companies will remain committed to achieving net-zero carbon emissions by 2050 and net water positivity by 2030 with the aim to spend USD 5 billion over the next 10 years to accelerate this transition. In the process of transitioning to net zero, they already secured 1.8 GW of Renewable Energy through power delivery agreements across our group companies. Vedanta’s digital-first approach and keen focus on advanced technologies have resulted in improved processes, strengthened cybersecurity, and easy access to information for effective decision-making. Each of Vedanta’s businesses has embarked on its own transformational journey towards digitalization and innovation and these will continue.