In a significant development, Vedanta Limited has announced that it will hold meetings of its equity shareholders and secured and unsecured creditors on February 18 to seek their final approval for the proposed demerger of the company.
The demerger, which was first announced in September 2023, aims to create five separate entities focused on aluminum, power, oil and gas, steel and ferrous, and other existing businesses under Vedanta Limited. The move is expected to simplify the company’s corporate structure, unlock value, and provide faster growth opportunities in each vertical.
According to Vedanta, the demerger will result in the creation of five independent companies, each with its own management team, governance structure, and growth strategy. The companies will be listed on the Indian stock exchanges, providing investors with direct exposure to each business.
The proposed demerger has already received clearance from the Mumbai Bench of the National Company Law Tribunal and has been approved by the stock exchanges. The meetings of equity shareholders and secured and unsecured creditors on February 18 will be the final step in the approval process.
Research firms and brokerage houses have expressed confidence in Vedanta’s demerger, seeing it as an opportunity for the company to unlock value and provide faster growth opportunities in each vertical. Emkay Research has stated that the demerger could lead to a re-rating of Vedanta’s stock, as investors will be able to take exposure to each business separately.
The share price of Vedanta Limited (VEDL) has risen by 72% in the last year, reflecting investor optimism about the company’s growth prospects. The company’s parent, Vedanta Resources Limited (VRL), has also raised $1.1 billion through new bond issuances, demonstrating strong investor demand for the company’s debt.
With the final approval for the demerger expected on February 18, Vedanta Limited is poised to embark on a new chapter in its growth journey. The company’s focus on unlocking value, providing faster growth opportunities, and creating independent businesses is expected to benefit shareholders and investors in the long run.
Discover more from Allycaral
Subscribe to get the latest posts sent to your email.
