Vedanta demerger entities listing: Valuations, debt allocation, expert views & fair values

The four demerged companies from Vedanta Ltd are set to debut on the BSE and NSE on Monday, June 15. The companies due to list are Vedanta Oil & Gas, Vedanta Power, Vedanta Aluminium Metal and Vedanta Iron & Steel. Vedanta Aluminium is reported to become the biggest company among them, which may overtake its parent after the special pre-open session. 

According to exchange notices, all four stocks will initially be placed in the trade-to-trade segment (T segment), where every transaction results in compulsory delivery and circuit filter is capped at 5 per cent. The listing follows Vedanta’s April announcement that each eligible shareholder would receive one share in each of the four companies for every Vedanta share held.

The company had fixed May 1 as the record date for the demerger, and while Vedanta shares have already adjusted to the restructuring, investors have been awaiting the separate listings. A host of brokerage firms have ascribed the valuations of these companies based on the their sum-of-the-part (SOTP) valuations.

Nuvama Institutional Equities said Vedanta’s resources portfolio offers scale, diversification and a strong balance sheet, helped by its low-cost, cash-rich zinc-lead-silver business. It said the company has globally competitive zinc production costs because of its captive mines, and future growth is likely to come from higher volumes in key divisions, including aluminium and zinc, as well as cost efficiencies in aluminium operations.

Nuvama also flagged risks including rising debt at Vedanta to repay parent debt, export duties on aluminium or zinc, lower zinc and aluminium prices or premiums, delays in coal block, alumina and aluminium expansion, exploration failure at Cairn, and a lack of volume growth at Zinc India.
 

Emkay Global Financial Services said it sees a strong re-rating case for Vedanta Aluminium and Vedanta Power. It said current valuations for HZ already reflect prevailing spot price assumptions, limiting near-term upside for the residual Vedanta entity that will house HZ.

Emkay said the demerger has been structured with balance sheet discipline, with debt aligned to cash flows, while the Oil & Gas and Iron & Steel businesses will be largely net-debt free. It added that shareholders will receive four additional shares for every existing share.
 

 

ICICI Securities said the separate listings are expected to begin in June and projected full commissioning of the aluminium facility by H1FY27. It said backward integration would strengthen with the Kurloi coal mine likely to start operations by late Q4FY26 and bauxite production expected in Q3FY27, while zinc and copper volumes could see a meaningful increase by FY28/29.

It added that Vedanta’s core earnings remain anchored by aluminium, zinc and silver, while the power business offers upside as management looks to double its asset base.
 

Kotak Institutional Equities said demerger, consolidated debt of $5.5 billion would be split into $3.5 billion, $1.0 billion, $0.8 billion and $0.2 billion across aluminium, Vedanta, power, and iron and steel, while oil and gas would remain debt free. Management sees scope to bring in external investors at each segment after deleveraging, and that five independent boards will decide dividend policies, it noted.
 

Motilal Oswal Financial Services said the dividend policy will shift from a rule-based system to a principle-based approach, allowing greater flexibility but reducing payout predictability. It said leverage improved to 0.95 times in March 2026 from 1.2 times in March 2025, while borrowing costs fell to about 8.9 per cent through refinancing and maturity optimisation.

It added that each demerged entity’s capital structure has been calibrated for long-term debt servicing, with Oil & Gas emerging debt free and Iron & Steel carrying near-zero debt.
 

Systematix Institutional Equities described the demerger as a key value-unlocking catalyst and said management indicated the likelihood of a dividend in 4QFY26 to address $275 million in ICL dues and interest, while reiterating a 6 per cent dividend yield. It said Vedanta Resources is expected to be self-funded over the medium term through dividends and brand fees.
 

Investec said FY26 EBITDA for the five entities stands at $2.9 billion, $2.6 billion, $0.2 billion, $0.14 billion and $0.5 billion, with net debt at $3.5 billion, $1.0 billion, $0.8 billion, $0.2 billion and nil, respectively.

It also pointed to project milestones at Sijimali and Ghogharpalli, said these could add about $100 per tonne to Ebitda, and said VRL’s FY27 cash flow requirement of about $1 billion could be met largely by brand fees and upstream dividends, while clarity on entity-level payout policies is still awaited.
 

CLSA said that reducing costs and expanding capacity in key businesses should support earnings. It said leverage at parent VRL has been reduced meaningfully, though debt has increased at the Indian entity, and added that timely commissioning of ongoing projects would keep debt from becoming a concern.

The global brokerage firm noted that the execution of growth and margin expansion projects, higher commodity prices, a high dividend payout and progress on parent leverage would be key triggers. It also said, given the large capex programme, it values capital work in progress at a 25 per cent discount.

The listings on Monday will mark the next step in one of the biggest restructurings in India’s metals and mining sector, with brokerages focusing on valuation upside in aluminium and power, debt allocation across the new entities, project execution and the dividend policies that will emerge after the split.