Vedanta demerger a pivotal step in creating world-class companies: Anil Agarwal

Vedanta Ltd ’s demerger, effective May 1, marks a pivotal step in creating focused, world-class companies with sharper strategic clarity, chairman Anil Agarwal said in a letter to shareholders on Tuesday, as the mining-to-metals conglomerate moves ahead with its long-awaited restructuring.

“The most awaited milestone for Vedanta this year is our demerger, effective 1st May 2026. This transformation marks a pivotal step in unlocking value by creating focused, world-class companies, each with sharper strategic clarity, disciplined capital allocation, and distinct growth pathways,” Agarwal said in his letter to shareholders.

Under the approved structure, Vedanta shareholders will receive one share each in the four newly carved-out companies for every one share held in Vedanta Ltd, while retaining their existing Vedanta share. The four resulting entities are Vedanta Aluminium Metal Ltd, Vedanta Power Ltd, Vedanta Oil & Gas, and Vedanta Iron and Steel Ltd, while Vedanta Ltd will remain the existing listed entity. The new entities are expected to list on the BSE and NSE after regulatory and exchange approvals, likely by mid-June.

Agarwal said each business will now have its own growth runway. “Through this demerger, each of our businesses is emerging as a ‘Vedanta’ in its own right – globally competitive, independently scalable, and benchmarked to the best in the world,” he said.

Debt to be aligned with earnings strength

The restructuring is also expected to redistribute Vedanta’s debt across the new entities. Analysts expect the bulk of the debt to sit with the aluminium business, given its scale and cash generation. Motilal Oswal Financial Services estimates Vedanta Aluminium will carry the highest debt at about $3.5 billion, though leverage is expected to remain below 1.3 times net debt-to-Ebitda due to strong cash flows. The residual Vedanta entity is expected to retain net debt of around $1 billion with leverage of 0.4 times, while Oil & Gas is expected to emerge as a zero-debt business and Iron & Steel with near-zero leverage.

Agarwal said Vedanta Aluminium is poised to maintain its lead across key global markets, with plans to double capacity to 60 lakh tonnes per annum. Vedanta Oil & Gas aims to scale output to 300,000–500,000 barrels per day with an investment of $5 billion, while Vedanta Power has 4.2 GW operational capacity and a 12 GW expansion pipeline, including plans to enter hydropower and nuclear energy.

For Vedanta Iron & Steel, Agarwal outlined plans to scale steelmaking capacity from 40 lakh tonnes per year to 100 lakh tonnes per year, and subsequently to 150 lakh tonnes per year, backed by captive iron ore mines in Goa, Odisha and Karnataka.

Residual Vedanta to house zinc, copper assets

Post-demerger, Vedanta Ltd will hold about 60% in Hindustan Zinc and also house Vedanta Zinc International, copper, ferro alloys and nickel businesses. Agarwal said copper and nickel are critical minerals India needs for long-term self-reliance.

The demerger follows Vedanta’s record FY26 performance, with revenue of ₹1.74 lakh crore and profit after tax of ₹25,096 crore. In the March quarter, Vedanta’s profit attributable to owners rose 92.3% year-on-year to ₹6,698 crore, while revenue from operations increased 47.5% to ₹24,609 crore.

Agarwal said the group’s strategy is to build a structurally stronger Vedanta driven by scale, cost leadership, disciplined capital allocation and consistent cash generation. “The stage is set for the next phase of growth and value creation,” he said.