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Informist, Friday, Oct. 31, 2025

 

--Vedanta: Natural decline led to Q2 oil, gas production declining YoY, QoQ

--CONTEXT: Vedanta mgmt's comments at post-earnings call with analysts

--Vedanta: See demerger scheme getting completed by FY26-end

--Vedanta: See alumina costs lower in Q3, Q4

 

By Rajesh Gajra and Akash Mandal

 

NEW DELHI/MUMBAI – Vedanta Ltd. Friday said it has had no specific engagement from India's Enforcement Directorate recently and that in the normal course of business, when statutory agencies seek information from the company, it has been compliant in responding. The management of the company said this in response to an analyst's question in a post-earnings conference call with investors and analysts on what "further recent contact" the company had had from the Enforcement Directorate in relation to recent reports on the company.

 

In the last few weeks, the US-based Viceroy Research LLC has issued reports alleging misgovernance and financial irregularities at Vedanta group and Vedanta Ltd.'s parent company, the UK-based Vedanta Resources. In Friday's call, in response to a question on whether recent reports on the parent company not having a corporate office or staff in London would imply issues with transfer pricing on the brand and strategic services fees going out of India, Vedanta's management said the parent company's lean corporate operating model was well understood in the market.

 

The company's management said the parent has a small corporate centre in London "but that office is also supported by resources dedicated through service agreements from Vedanta Ltd. as well out of both Mumbai and Delhi." Vedanta Ltd. pays brand and strategic services fees to its parent company Vedanta Resources for the use of the 'Vedanta' name and logo, and for strategic services offered to the company.

 

In its annual report for 2024-25 (Apr-Mar), Vedanta Ltd. said in a note to its consolidated accounts that it had recorded an expense of INR 23.97 billion under the brand licence and strategic service fee agreement with Vedanta Resources. The company said in Friday's post-earnings conference call that "the rationale for overall brand fee and strategic services has been also addressed in the past in detail." Apart from usage of the 'Vedanta' brand and name, the company receives services from the parent company "in terms of strategic acquisitions, mergers, capital market, and much more."

 

To the analyst's doubt that none of these services are taking place in London, UK, "which is where the money (brand and strategic services fees paid by Vedanta to its parent company) is going", the company's management said "it doesn't have to be domiciled at a geography. When we use a logo or a name as Vedanta and get services, it is a service that is being rendered and a service that is being received by Vedanta India entities."

 

On the status of the pending demerger scheme, the management said "the final NCLT (National Company Law Tribunal) hearing is scheduled for November 12, and we expect approvals to follow." The demerger scheme is likely to be completed by end of FY26. The demerger scheme proposes operations of its aluminium, power, oil and gas, and iron and steel segments to be transferred to four separate and independent companies - Vedanta Aluminium Metal Ltd., Talwandi Sabo Power Ltd., Malco Energy Ltd., and Vedanta Iron and Steel Ltd. Post the demerger, Vedanta Ltd. will continue to have control over subsidiary Hindustan Zinc Ltd. and all base metal operations.

 

With regard to its operational performance for the September quarter, the management said that the production in its oil and gas segment was negatively "impacted by natural declines" in a group of oilfields in Rajasthan and also by delays in alkali-surfactant-polymer' injections to enhance oil recovery. On alumina prices, the management expects prices to go down further in the December and March quarters.

 

During market hours Friday, Vedanta reported a consolidated net profit of INR 17.98 billion for the September quarter, down 59% on year. Its top line rose nearly 6% on year to INR 392.18 billion. On Friday, shares of the mining major ended 2.6% lower at INR 493.55 on the National Stock Exchange.  End

 

Edited by Avishek Dutta

 

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