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Informist, Tuesday, Dec. 16, 2025

 

--NCLT Mumbai approves Vedanta's scheme of arrangement for demerger of cos

 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal on Tuesday approved Vedanta Ltd.'s scheme of arrangement for the demerger of the company's businesses and rejected the government's objections to the same. "The sanction to the company scheme is granted," the tribunal said. A detailed order is awaited.

 

On Sept. 30, Vedanta extended the deadline to implement the demerger scheme by six months to Mar. 31, citing delay in approvals from the Mumbai bench of the National Company Law Tribunal and other government authorities.

 

Vedanta has proposed the demerger of its aluminium, oil and gas, and iron ore and steel businesses into separate companies - Vedanta Aluminium Metal Ltd., Malco Energy Ltd., and Vedanta Iron and Steel Ltd. The company had filed a separate application with the National Company Law Tribunal for demerging the power business into Talwindo Sabo Power Ltd. According to Vedanta, the proposed demerger "is a strategic step to unlock long-term value by creating sector-focused, pure-play businesses with independent management teams." 

 

The government had opposed the merger, saying the company had concealed and failed to disclose key details. The government also flagged concerns over inflated revenue and concealed liabilities of the company. In its response, Vedanta had said it will issue a corporate guarantee in favour of the petroleum and natural gas ministry "once the (demerger) scheme becomes effective". The corporate guarantee will be in place if Vedanta's subsidiary, Malco Energy, is unable to meet or satisfy any potential contractual liability, if any, towards the petroleum and natural gas ministry under the production sharing contracts and revenue sharing contracts related to oil and gas blocks, Vedanta had said.

 

The Securities and Exchange Board of India, which had earlier issued a warning letter to Vedanta about its demerger proposal, has approved the demerger scheme, the regulator had told the tribunal in October.

 

Shares of Vedanta closed over 3.7% higher at INR 569.50 on the National Stock Exchange.  End 

 

Reported by Surya Tripathi

Edited by Ashish Shirke

 

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