Vedanta Shares Flat Ahead of NCLT Demerger Hearing

Shares of Vedanta Ltd showed minimal movement on October 8th, trading 0.60% lower at Rs 469 on the National Stock Exchange (NSE) after hitting an intraday high of Rs 475. This muted trading activity reflects investor caution ahead of the final hearing at the National Company Law Tribunal (NCLT) concerning the company’s ambitious demerger plan. The flat performance indicates market participants are adopting a wait-and-see approach, preferring to await clarity from the tribunal before making significant trading decisions.

The trading pattern underscores how corporate restructuring events of this magnitude can create periods of market uncertainty. With Vedanta’s proposed demerger representing one of India’s most significant corporate reorganizations in recent years, the NCLT’s decision carries substantial weight for both current shareholders and potential investors. The share price stability despite the high-stakes hearing suggests the market has largely priced in the known variables while remaining sensitive to unexpected outcomes from the tribunal proceedings.

Vedanta has made substantial progress in resolving legal obstacles that could have complicated its demerger timeline. On September 17th, the company confirmed that SEPCO had withdrawn its intervention application, removing a significant potential roadblock. This development followed the resolution of a long-standing dispute between Vedanta and SEPCO over the company’s power business, which also led to SEPCO withdrawing its arbitration claims against the conglomerate.

Meanwhile, the Ministry of Petroleum and Natural Gas (MoPNG) had previously made representations during earlier NCLT proceedings, with Vedanta’s legal team providing the required clarifications. The MoPNG’s application was reserved for judgment, indicating that regulatory concerns had been adequately addressed through the clarification process. These successive resolutions demonstrate Vedanta’s strategic approach to clearing procedural hurdles ahead of the critical demerger hearing.

Vedanta’s restructuring plan involves splitting the conglomerate into five independent, publicly-listed businesses: Aluminium, Oil & Gas, Power, Steel, Ferrous Materials, and Base Metals. This vertical separation aims to unlock value by allowing each business unit to operate with focused management and distinct strategic priorities. The company announced on September 30th that the demerger deadline had been extended to March 2026, subject to necessary government approvals.

For existing shareholders, the demerger presents a straightforward transition path. Shareholders will receive one share in each of the five demerged entities for every share they currently hold in Vedanta Ltd. This 1:1 distribution ratio ensures proportional ownership across the new corporate structure while maintaining shareholder value through the transition. The extended timeline to March 2026 provides adequate runway for completing regulatory requirements and operational separations.

The proposed structure reflects a growing trend among diversified Indian conglomerates to create more focused, nimble entities that can better respond to sector-specific opportunities and challenges. By separating its core businesses, Vedanta aims to enhance operational efficiency, improve capital allocation, and potentially attract investors with specific sector preferences who might have been hesitant to invest in the diversified parent company.