Vedanta demerger: Stock in focus as equity shareholder, creditor meetings today

Shares of Vedanta Ltd are in focus today as the company board meets equity shareholders, secured creditors and unsecured creditors, regarding the demerger of the Anil Agarwal company's diversified businesses.

The proposed demerger will create independent companies housing aluminium, oil & gas, power steel and ferrous materials, and base metals businesses under the name of Vedanta Ltd, Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Base Metals, Vedanta Steel and Ferrous Materials and Vedanta Power.

JM Financial noted that shareholders of Vedanta would receive one equity share each of the 5 newly listed companies for every one share of Vedanta they held. The approval from stock exchanges have already been received. The meeting today with shareholders and creditors would seek final approval of demerger.

Nuvama expects the demerger process to be likely conclude by end-Q1FY26.

"The board of the demerged company, VBML and the resulting companies have approved the updated scheme of arrangement, between the demerged company and resulting company 1 and resulting company 2 and resulting company 3 and resulting company 4 and their respective shareholders and creditors," Vedanta said last month.  
The meeting with equity shareholders is scheduled for 10 am. Secured creditors meet will take place at 11.45 am and unsecured creditors at 1 pm.

The Vedanta management recently suggested that alumina cost may have peaked in the December quarter and major benefits of lower alumina price and higher contribution of captive alumina should reflect from June quarter. VRL’s debt has been managed at average interest rate of less than 10 per cent in H2FY26 against 13.3 per cent earlier, with the debt maturity extending to FY34. The demerger of the business likely by July 2025, it suggested.

Analysts said Vedanta's December quarter performance was largely in line across segments, adding that capex plans were progressing well and could soon lead to further cost savings.

The company management is targeting to maintain strong growth in earnings, led by the upcoming capacity that would produce higher VAP products, MOFSL said.

Vedanta stayed firm on its deleveraging plans, it said in a recent note, adding that higher cash flows will support both its expansion plan and deleveraging efforts.

"The stock currently trades at 4.9 times FY27E EV/Ebitda. We largely maintain our estimates and reiterate our Neutral rating on the stock with a SoTP-based target price of Rs 500," the domestic brokerage said.

Vedanta's net debt excluding Hindustan Zinc increased 3 per cent sequentially to Rs 69,500 crore in the December quarter, but is expected to fall to Rs 60,500 crore by end-FY26.