CHENNAI: Vedanta Ltd on Tuesday received a crucial legal clearance from the Mumbai bench of the National Company Law Tribunal, paving the way for the breakup of the diversified oil-to-metals conglomerate into five separate businesses, the company confirmed in a clarification sought by stock exchanges. The approval marks a major milestone in a restructuring exercise that the company has pursued for over two years, aimed at simplifying its corporate structure and sharpening the strategic focus of each business vertical.
Under the approved scheme, the existing Vedanta Ltd will be reorganised so that its major operating segments function as independent entities. The businesses to be housed in separate units include aluminium, oil and gas, power, steel and iron, while the residual Vedanta entity will largely represent the base metals portfolio. Each of these units is expected to operate with its own management, balance sheet and strategic priorities, with eventual listings planned for the demerged companies.
The tribunal’s nod follows earlier approvals from shareholders and creditors, who had backed the proposal with a comfortable majority. However, the process had encountered regulatory and legal scrutiny, particularly around concerns raised by government authorities regarding the protection of dues and the enforceability of obligations after the demerger. Tuesday’s order signals that the tribunal was satisfied with the company’s responses and the structure of the scheme, allowing Vedanta to move into the final phase of implementation.
The market response to the decision was positive, with Vedanta shares rising sharply as investors welcomed the clarity on the long-delayed restructuring. The rally reflected expectations that a simpler corporate architecture could unlock value that was previously obscured within the conglomerate framework. Analysts have long argued that Vedanta’s varied businesses, spanning natural resources, energy and manufacturing, were being valued at a discount due to complexity, cross-holdings and concerns over capital allocation.
From a strategic perspective, the demerger is intended to allow each business to pursue growth and funding strategies suited to its sector. Capital-intensive operations such as aluminium and oil and gas could attract specialised investors, while mature or cash-generating units may gain flexibility in dividends or debt reduction. The separation is also expected to improve transparency, governance and accountability by clearly ring-fencing assets, liabilities and cash flows.
That said, the approval does not eliminate execution risks. The task of disentangling shared services, intercompany loans, guarantees and regulatory licences remains complex. Each new entity will need to establish independent financial structures and comply with sector-specific regulatory requirements. In addition, scrutiny is likely to continue from lenders and government authorities, particularly in businesses where public resources, mining rights or energy supply obligations are involved.
Debt allocation across the demerged entities will be a key factor influencing investor confidence in the next phase. Vedanta’s consolidated leverage has been a long-standing concern for the market, and how liabilities are distributed among the new companies will shape their credit profiles and access to capital. Any perception of uneven debt loading or lingering contingent liabilities could temper enthusiasm despite the structural clarity offered by the split.
Looking ahead, the company is expected to complete the remaining procedural steps, including regulatory filings and operational separation, over the coming months. If the timeline holds, the reorganisation could be completed by the end of the current financial year. For Vedanta, the NCLT approval represents a decisive step towards reshaping the group, but the success of the exercise will ultimately depend on disciplined execution and the ability of each standalone business to deliver sustainable performance on its own merits.