NCLT approves demerger of Vedanta. What does it mean for investors?

December 17, 2025

Vedanta Ltd’s stock has been rising steadily over the past few months. The rally was driven by several developments, including a sharp rise in commodity prices and hopes for approval of a demerger.

And now, the National Company Law Tribunal (NCLT) bench in Mumbai has approved Vedanta’s demerger plan on December 16, 2025.

Shares of Vedanta rose up to 4% after the approval announcement.

In this editorial, we will look at the future prospects for Vedanta Ltd shares post NCLT approval. Let us first tell you about Vedanta Ltd.

About Vedanta Ltd

Vedanta Ltd is a leading global natural resources conglomerate, actively engaged in sectors including aluminium, zinc-lead-silver, oil and gas, iron ore, steel, copper, energy, ferroalloys, nickel, semiconductors and glass.

The activities extend across India, South Africa, Namibia and Liberia.

What does the NCLT approval mean for shareholders of Vedanta Ltd?

With the approval of the NCLT, Vedanta Ltd begins the execution phase of a transformational demerger that will create five different listed companies (including the already listed Vedanta Limited), each with dedicated capital structures, dedicated management teams and a clear strategic mandate.

The demerger is intended to unlock long-term value for shareholders and provide investors with direct access to premium, industry-leading assets.

Vedanta’s businesses will operate as independent, sector-specific businesses, each positioned to take advantage of their respective market opportunities.

The resulting entities are as follows:

• Vedanta aluminum
• Vedanta oil and gas
• Vedanta iron and steel
• Vedanta power
• Vedanta Limited (to continue as the parent company housing Hindustan Zinc Limited and encouraging forward-looking businesses).

Shareholders of Vedanta Limited will receive shares in each of the four resulting listed entities (in addition to their shareholding in Vedanta Limited) in proportion to their existing shareholdings, ensuring continuity of ownership and enabling direct participation in the growth trajectories of individual companies.

A look at the resulting companies

1. Vedanta aluminum: The company will grow into a global leader in fully integrated aluminum manufacturing, maintaining a strong cost competitive position, offering a diverse product line and a growing emphasis on value-added, low-carbon aluminum solutions.
2. Vedanta oil and gas: The company, which will function as a dedicated upstream exploration and production company with a large onshore and offshore footprint and aims to enhance domestic energy security through disciplined development and technology-led resource maximization, will become India’s largest private oil and gas exploration and production company.
3. Vedanta Power: This entity would transform into one of the largest private sector energy producers in India, housing existing independent power generation assets and pursuing opportunities in India’s developing energy market.
4. Vedanta Iron and Steel: Value-added iron ore, steel and ferrous businesses will be combined by India’s largest iron ore and steel producer, creating a vertically integrated platform with scope for expansion and green steel initiatives.
5. Vedanta Limited: Vedanta Limited, the surviving entity, will retain its stake in Hindustan Zinc and act as a business incubator for new ventures, including initiatives critical to India’s strategic interests.

Financial data of Vedanta

Financial Highlights of Vedanta

Source: EquitymasterIn the second quarter of FY26, Vedanta Ltd reported a sharp increase in consolidated revenue to Rs 398,680 mln, compared to Rs 376,340 mln year-on-year.

However, net profits did not evolve in parallel and fell to Rs 34,800 mln compared to Rs 56,030 mln in the same period last year.

What should shareholders expect?

Markets are convinced that the split could help eliminate the conglomerate discount. For individual investors considering the stock prior to the ex-split date, the most important consideration is simple: Will the combined market capitalization of the individual entities post-split exceed the pre-split market capitalization?

Post-split, investors will need to analyze each individual company’s prospects with respect to its industry and fundamentals.

Currently, certain industries, such as zinc, aluminum, silver and copper, are benefiting from a favorable position due to rising commodity prices. Sectors such as the oil and gas sector, on the other hand, are feeling the consequences of low global prices.

Investors should evaluate the company’s fundamentals, corporate governance and stock valuations as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for informational purposes only. It is not a stock recommendation and should not be treated as such. Read more about our referral services here…