Vedanta Demerger: Anil Agarwal Unveils Ambitious Growth Strategy for Demerged Entities

Billionaire mining tycoon Anil Agarwal has outlined ambitious plans for Vedanta Ltd.’s demerger that has been delayed for over two years. The National Company Law Tribunal this week approved the demerger plan, paving the way for the splitting of the metals-to-oil conglomerate into sector-specific entities across aluminium industry, oil and gas sector, power sector, and iron and steel sector.

Vedanta’s Growth Strategy

He emphasised that each demerged entity will operate as a standalone Vedanta in terms of profitability, generating substantial cash flows. ‘There will never be a constraint on capex,’ Agarwal, the chairman of the group, told NDTV Profit in a televised interview, underlining the group’s confidence in its future growth trajectory.

Hindustan Zinc Ltd.’s Production Plans

He said Hindustan Zinc Ltd‘s production will rise from 1.2 million tonnes per annum (mtpa) to 3 mtpa. Currently, the company also produces 800 tonnes of silver, meeting one-fourth of India’s demand, and aims to cater to the entire domestic requirement within three years.

Vedanta’s Green Aluminium Plant

Agarwal announced that Vedanta is building a green aluminium plant with a capacity of 3 million tonnes, citing growing demand in the country amid the infrastructure push by the government.

Oil and Gas Exploration and Production

He also highlighted changes in government regulatory policy on oil and gas exploration and production, saying that Vedanta plans to deploy 25 rigs to produce up to 500,000 barrels per day initially.

Iron and Steel Production

The company is also developing infrastructure for iron and steel production via sustainable technology and aims to generate 20,000 MW of power generation.

Vedanta Demerger Timeline

The Vedanta demerger was proposed in 2023 to streamline operations, improve management focus, and unlock shareholder value. Initially, the company had outlined a plan to split into six independent entities. The revised scheme, however, retains the base metals business within the parent company.

The group expects to complete the demerger by end of the current financial year ending March 2026, with all resultant entities listed by April.

Management Teams in Demerged Entities

Management teams in the demerged entities will align decision-making more closely with customer needs, investment cycles, and commodity-specific dynamics, while enabling investors to evaluate and value each business on its own merits, the company said after the NCLT nod.

Vedanta’s Dividend Policy

Vedanta is a popular stock for its periodic dividend payout, with an annual dividend yield of 9%.

‘Dividend policy will always be an integral part of Vedanta Group. I live for dividend,’ Anil Agarwal said.

Promoter Group’s Stake

The promoter group owns 56.38% stake in the Mumbai-listed company.