The highly anticipated demerger of Vedanta into five separate listed entities has hit a roadblock with the National Company Law Tribunal (NCLT) on Wednesday deferred hearing on the proposal to September 17.

On Wednesday, Vedanta share, which has gained nearly 3% since the shareholder’s approval for the demerger, fell 1% to ₹445.45 on the BSE on August 20, 2025.

The tribunal postponed the hearing on the demerger proposal after the central government reportedly raised objections, alleging that the billionaire Anil Agarwal-led company concealed key information, inflated revenues, and hid liabilities.

According to reports, government representatives claimed that Vedanta altered significant elements of its demerger scheme after securing No Objection Certificates (NOCs) from the Securities and Exchange Board of India and the stock exchanges.

Vedanta, in an exchange filing on August 14, 2025, however, acknowledged that the market regulator had issued a warning letter to the company on August 13 for noncompliance in relation to the modification of the scheme of arrangement filed with the stock exchange (i.e., with respect to the withdrawal of Part V of the Scheme) without prior written consent of Sebi.

“The company has been advised to exercise caution in future and forward the board’s comments to Sebi on satisfaction of corrective actions undertaken to ensure future compliance,” the filing noted.

Following NCLT’s deferral decision, Vedanta said in a statement that it has filed a detailed response to the Centre’s representation. “The Company has informed the Hon’ble National Company Law Tribunal that the Company will issue a corporate guarantee in favour of the Ministry of Petroleum and Natural Gas (MoPNG) once the Scheme becomes effective. This is in the event Malco Energy Limited (“MEL”) is unable to meet or satisfy potential contractual liability, if any, towards MoPNG arising under the Production Sharing Contracts and Revenue Sharing Contracts (pertaining to the oil and gas blocks),” the company’s spokesperson said in a note.

The statement mentioned that the proposed demerger is a strategic step to unlock long-term value by creating sector-focused, pure-play businesses with independent management teams.

“Sebi has confirmed it has no further comments on the merits of the Scheme, and it had issued an administrative cautionary letter over a procedural lapse. This letter carries no financial or operational restrictions, and the matter has already been disclosed by the Company. The Company has received NOCs from stock exchanges on the modified Scheme,” the note read.

The spokesperson also clarified that certain reports linking the Supreme Court’s August 19, 2025 judgment to the demerger are misplaced. “The judgment pertains to a legacy contractual matter concerning Talwandi Sabo Power Ltd.’s appeal regarding customs duty benefits under the Mega Power Policy, and has no bearing on the demerger process. Vedanta is reviewing the order and evaluating legal options.”

On Tuesday, the apex court rejected Vedanta's request for additional compensation in the Talwandi Sabo case. Talwandi Sabo Power, a wholly-owned subsidiary of the company, had filed a petition before the SC challenging the entitlement to foreign trade policy benefits on account of mega power status.

As per reports, the ministry of petroleum, one of the key stakeholders in the oil and gas business, has raised objections to the demerger, voicing concerns over the payment of disputed dues that may become payable by Cairn India depending on the outcome of the ongoing arbitration. Cairn India was acquired by Vedanta Resources Plc, a parent entity of Vedanta, in 2011, and later merged into Vedanta Limited.

“Vedanta remains committed to driving sustainable growth while safeguarding the interests of its investors, partners, regulators, and the country at large,” the release added.

Vedanta initially announced the demerger plan to split into five separate listed entities in September 2023, which received nod from shareholders and creditors in February 2025. However, the finalisation has been delayed due to pending regulatory approvals, including from the NCLT and government authorities.

The company claims that the demerger will unlock value for shareholders and allow them to invest in specific sectors based on their preferences. For every one share of Vedanta held, shareholders will receive one share in each of the four newly listed companies (excluding the parent entity) upon completion of the demerger.

Vedanta, a subsidiary of the UK-based Vedanta Resources, operates across multiple sectors such as oil and gas, commodities (zinc, lead, silver, copper, iron ore, steel, aluminium) and power.

Early this year, Vedanta Resources had appointed Deshnee Naidoo as its first Chief Executive Officer and in the Q1 FY26 earnings call of Vedanta Ltd, Naidoo, had told analysts that she expects the demerger to come through by September-October.