Corporate restructuring is quite common among businesses as it helps them unlock new business horizons while creating new opportunities for investors. One of the similar moves is announced by Vedanta Limited, under which the company will be split off into multiple sector-focused companies. Vedanta demerger scheme aims to improve operational efficiency and create long-term shareholder value.
Vedanta demerger, which was scheduled to be completed by September 2025, at present has faced regulatory challenges and deferred hearings. However, despite this, Vedanta continues to keep the shareholder interests in mind and is committed to deliver growth.
What is the Vedanta Demerger Scheme?
Vedanta Demerger Scheme is a strategic plan to split Vedanta Ltd. into five independent, pure-play companies. Each of the companies will focus individually on metals, aluminium, oil & gas, and power. The new companies to be formed include Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron and Steel and Vedanta Limited.
According to the scheme, Vedanta’s shareholders will receive one share in each new entity, in addition to their existing Vedanta shares. This restructuring process adheres to international procedure, where conglomerates separate core businesses to sharpen investor focus and improve valuations.
Vedanta Demerger: Regulatory Challenges
Similar to many other large-scale global entities that have opted for corporate restructuring, Vedanta’s demerger has also witnessed certain regulatory hurdles.
Government Delays (August 2025): The government has some reservations regarding the proposed restructuring plan due to undisclosed liabilities and overstated revenue figures in the filings. The National Company Law Tribunal (NCLT) is looking into this matter as the govt. officials have raised some questions.
SEBI Intervention: The Securities and Exchange Board of India identified some procedural lapses in Vedanta demerger after obtaining a No Objection Certificate (NOC).
NCLT Proceedings: The final hearing on Vedanta’s demerger will be on September 17, 2025.
Although such developments may have led to some uncertainties, Vedanta has maintained transparency to address them.
Vedanta’s Proactive Response
Despite these regulatory hurdles, Vedanta has remained confident in the demerger scheme. Following the deferral, Vedanta filed a detailed reply to the Centre’s representation and is ready to provide a corporate guarantee to the Ministry of Petroleum and Natural Gas to protect against possible liabilities under oil and gas contracts. According to the company’s spokesperson, Vedanta is fully cooperating with SEBI and has taken the appropriate actions. The Board’s comments will also be shared with SEBI at the earliest.
Vedanta further disclosed that the SC judgment dated August 19 was a legacy contractual matter and is not related to Vedanta’s demerger process. Besides, Vedanta also clarified that the Supreme Court’s ruling was related to an old matter involving Talwandi Sabo Power Ltd. and has no bearing related to the scheduled Vedanta demerger. Such steps highlight the company’s focus on ensuring regulatory clarity while protecting investor trust.
Vedanta Demerger: Background
Vedanta’s Chairman, Anil Agarwal, announced the demerger plan in September 2023. According to the demerger, the company will split into five separate businesses with each one focusing on aluminium, oil and gas, power, and base metals. This corporate restructuring was one of the bold decisions taken by the company to focus on core areas, boost efficiencies, and create more shareholder value.
Though this demerger was scheduled to be completed by March 2025, due to some regulatory approvals, including the NCLT’s clearance, it was extended till September 2025. Despite the regulatory challenges related to the Vedanta demerger scheme, the company’s shareholders were optimistic about this decision. In February, 99.99% of shareholders, 99.59% of secured creditors, and 99.95% of unsecured creditors approved the proposed demerger.
Vedanta Demerger in a Global Context
In terms of corporate restructuring, Vedanta is not the only company to announce corporate demergers to increase operational efficiency. Recently, Apollo Hospitals Enterprises has also revealed the spin-off of its omni-channel pharmacy and digital health businesses. Besides, Tata Motors will also demerge its passenger and commercial vehicle business into two separate, independently listed companies, with a listing expected later this year.
The Vedanta demerger will move ahead with the same principles, separating businesses to build focused, competitive entities aligned with India’s growth trajectory. The upcoming NCLT hearing on September 17, 2025, plays an important role in determining the timeline.
However, Vedanta’s positive approach and proactive engagement with regulators reinforce its ability to see this plan through.
Conclusion
Despite some regulatory challenges, Vedanta is optimistic about the proposed demerger. For a legendary company like Vedanta, this is not just restructuring its business units; rather, it is a well-researched strategy for the company’s growth and expansion.