Vedanta is planning to seek approval from its shareholders to split the company’s businesses into five distinct entities and list them separately on the exchanges. The decision comes after the company delivered the highest dividend yield among its peers.
Last September, Vedanta had announced plans to demerge its business into six entities and list them on the exchanges. However, last month, the company decided to hold off on spinning off the base metal business until it reached the desired scale.
In a letter addressed to shareholders, Anil Agarwal, Chairman of Vedanta, highlighted the company’s impressive wealth creation and dividend yield, which stood at 81%. He noted that investments in Vedanta’s shares had grown five times over the last five years.
Agarwal emphasized the company’s commitment to strengthening its businesses to drive strong growth. The communication follows Vedanta’s record third-quarter EBITDA of ₹11,284 crore, the highest in the past eleven quarters. The company also reported a net profit of ₹4,876 crore, marking a 70% increase from the same period last year. Additionally, Vedanta achieved its lowest net debt to EBITDA ratio in the past seven quarters, standing at 1.4 times.
During the third quarter, Vedanta saw an increase in aluminium production to 6.14 lakh tonne and 18.2 lakh tonne over nine months, marking a 3% year-on-year growth. Alumina production also witnessed a 16% increase to 15.43 lakh tonne over nine months, while Zinc India reported its highest-ever refined metal output during the period.
Regarding the demerger plans, Agarwal stated that Vedanta would soon seek final approval from its creditors and shareholders. Post-demerger, every Vedanta shareholder will receive one additional share in each of the four newly demerged companies – Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, and Vedanta Steel and Ferrous Metals. This move aims to broaden Vedanta’s investor base while allowing new investors to choose between the different entities and industry verticals they represent.
The news article was published on February 2, 2025.
