Vedanta is set for the next phase of growth and value creation: Anil Agarwal

Vedanta demerger: In a letter to shareholders post the FY26 earnings on Tuesday, Vedanta Chairman, Anil Agarwal, said the company “is embarking on a very exciting new chapter, where strong performance meets exceptional transformation and the stage is set for the next phase of growth and value creation.” The last fiscal, according to him, was the best ever in terms of financial performance – with the highest ever profit after tax of ₹25,096 crore and revenue of ₹1,74,075 crore supported by operational excellence across businesses.

Vedanta’s demerger became effective on May 1. This will eventually see the listing of Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron & Steel and Vedanta Ltd, the flagship that will hold around a 60% stake in Hindustan Zinc. “This transformation marks a pivotal step in unlocking value by creating focused, world-class companies, each with sharper strategic clarity, disciplined capital allocation and distinct growth pathways,” said Agarwal.

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Meanwhile, Vedanta, a diversified natural resources conglomerate, has been battling its own set of issues, most notably the acquisition of Jaiprakash Associates Limited (JAL). Earlier this week, the National Company Law Appellate Tribunal (NCLAT) upheld Adani Group’s resolution plan, effectively rejecting the bid from Vedanta.

Adani’s bid for ₹14,535 crore was lower than Vedanta’s offer, though the former won it with 89% approval from the Committee of Creditors. What seems to have clinched it was an upfront payment of ₹6,000 crore and the rest payable within two years. By contrast, Vedanta offered a five-year payment plan. The most attractive part of the asset lay in 3,985 acres of prime land housed in the NCR.

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Independent market expert Ambareesh Baliga remains optimistic about Vedanta in the long-term. “The demerger itself is value-accretive for the shareholders. The businesses are doing well and the concern around high debt at the holding company level is now spread across the entities,” he says. The potential concern, as he sees it, could be around addressing liquidity challenges through the process. More specifically, on losing the JAL bid to Adani,

Baliga thinks it is a not a huge negative and has been taken into consideration. “Vedanta operates in difficult businesses that are largely placed well. One cannot eliminate the possibility of a strategic investor coming into any of the demerged entities.”

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Vedanta has also faced headwinds with its high-profile semiconductor project after Foxconn walked out on the joint venture. The capex outlay for that is around $20 billion and the company has been looking for a partner. For now, all eyes are on the demerger and what means. A report put out by ICICI Direct last month after Vedanta’s Q4 numbers said the “demerger is expected to be a value unlocking event for the company with its high growth aluminium and power businesses to fetch better valuations compared to the current structure of being part of a listed conglomerate entity.”