Vedanta demerger faces roadblock as Centre raises objections
New Delhi: Vedanta Ltd.’s ambitious plan to split into multiple listed entities has hit a hurdle, with the Central government raising “serious objections” to the proposal, Reuters reported on August 20, citing CNBC-TV18.
According to the government, the demerger could involve concealment and non-disclosure of critical information, inflated revenues, and undisclosed liabilities.
The development comes soon after the markets regulator had cautioned the company over compliance-related lapses.
The billionaire Anil Agarwal-led mining conglomerate had pitched the restructuring as a way to improve its financial performance.
But the latest setback means a more difficult path ahead.
The National Company Law Tribunal (NCLT) has now postponed the hearing on the case to September 17.
Vedanta’s response referenced an earlier cautionary letter from SEBI, noting it was administrative in nature, carried no financial or operational restrictions, and had already been disclosed.
The company also said stock exchanges had granted no-objection certificates on its modified scheme.
On concerns flagged by the Ministry of Petroleum and Natural Gas (MoPNG), Vedanta told the tribunal it would provide a corporate guarantee in favour of the ministry.
This is to cover any potential liability of Malco Energy Ltd. under production and revenue-sharing contracts for oil and gas blocks if MEL is unable to meet obligations.
The group clarified that certain reports linking the Supreme Court’s August 19, 2025, ruling to the demerger were misplaced.
The judgment, it said, related to a legacy contractual dispute involving subsidiary Talwandi Sabo Power Ltd. and claims under the Mega Power Policy, and has no bearing on the demerger.
Vedanta reiterated that the proposed restructuring is aimed at unlocking long-term value by creating four pure-play businesses with independent management teams in aluminium, oil and gas, power, and base metals.
The company stressed its commitment to sustainable growth while protecting the interests of investors, regulators, and stakeholders.
The demerger process has seen back-and-forth since September 2023, when Vedanta first announced the plan.
Initially set for completion by March 2025, the deadline was extended to September 30, 2025 due to pending approvals.
At an NCLT Mumbai bench hearing on July 2, MoPNG had also voiced objections, while NSE confirmed it had issued a no-objection certificate.
The case will now be heard on September 17, with the Centre expected to present its detailed stance on the scheme.
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