Vedanta shares in focus as secured creditors okay demerger scheme

Shares of Vedanta Ltd are in the spotlight today after the Anil Agarwal-led company said its demerger proposal received a go ahead from 75 per cent of its secured creditors for obtaining clearance from stock exchanges and is subsequently filing its demerger scheme with the National Company Law Tribunal (NCLT) for its proposed demerger. The metals & mining company is now filing its demerger scheme with the National Company Law Tribunal (NCLT). This proposed demerger aims to simplify Vedanta’s corporate structure by creating independent businesses, providing global investors with direct investment opportunities in pure-play companies.

Vedanta, the sole producer of zinc and silver in India. plans to demerge its businesses into six separate entities: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Ltd. The demerger will follow a simple vertical split, where shareholders will receive 1 share of each of the 5 newly listed companies for every 1 share of Vedanta Limited they hold.

Vedanta has a strong track record of delivering significant returns to its shareholders. As of June 30, 2024, the company’s total shareholder return over five years was 276 per cent, and the five-year average accumulated dividend yield stood at 65 per cent.

Vedanta is India’s largest producer of aluminium and largest private sector producer of oil, along with being one of India's largest generators of power and purchasers of renewable energy. 

Meanwhile, the stock is also in focus after Vedanta received assessment order determining demand of Rs 12,89,10,30,310 including tax and interest, from the Assessment Unit (NFAC) of the Income Tax Department for the Assessment Year 2020-21. Vedanta said it has identified a computational error in this demand determination and will file a rectification request before Jurisdictional Assessing officer (JAO).