Vedanta demerger: NCLT nod, 5-way split by FY26 timeline

Why Vedanta’s demerger is back in focus

Vedanta Ltd’s demerger plan has cleared key milestones and is now in the execution phase, reshaping how investors may value its portfolio of metals, mining, energy, and resources businesses. The company’s scheme has received approvals from shareholders as well as secured and unsecured creditors, and later received tribunal clearance as well. Brokerages tracking the process have argued that the split can narrow the conglomerate discount by making each business a pure-play listed entity with its own management and capital allocation.

The latest updates also highlight two parallel priorities for the group: progressing statutory approvals and asset transfers for the demerged entities, while continuing efforts on balance-sheet deleveraging. In research commentary around the process, analysts have flagged the aluminium business as a key driver of potential value unlocking, supported by capacity additions and a clearer financial structure post-reorganisation.

What approvals have been received so far

A major milestone came on 18 Feb 2025, when Vedanta’s shareholders, secured creditors, and unsecured creditors approved the demerger scheme. Following this, the company indicated it would move to the next phase that includes the second motion of NCLT approval and other statutory permissions.

Separately, reporting in the supplied material notes that the Mumbai bench of the National Company Law Tribunal (NCLT) sanctioned the scheme of arrangement, based on a stock exchange disclosure dated 16 Dec 2025. The tribunal approval was described as removing a major hurdle after earlier government objections had delayed the process.

Five entities, with an earlier six-entity plan in the background

The material provided contains two structures at different points in time. One part describes a plan to create six separate listed entities, while later updates and filings describe a revised structure resulting in five separately listed companies (including the existing listed Vedanta Ltd).

Under the five-company structure cited in the filings, the resulting listed entities are:

• Vedanta Aluminium
• Vedanta Oil & Gas
• Vedanta Iron & Steel (also referred to as Steel and Ferrous Materials)
• Vedanta Power
• Vedanta Ltd (remaining parent entity, housing Hindustan Zinc and other businesses)

A further update in the supplied text states Vedanta revised its previously proposed scheme on Dec 20, deciding to retain the Base Metals company within Vedanta Ltd, which is presented as the reason for shifting from six entities to five.

Timeline: H2FY26 and March 2026 targets

On timelines, the material points to FY26 as the key window. One note expects completion in H2FY26, while another states the company is targeting completion by March 31, 2026. A separate line in the prompt also says the demerger is expected to take three to four months post-regulatory approval, aligning the closing steps with a March 2026 outcome.

The same set of updates also references a setback related to the Talwandi Sabo Power Limited (TSPL) demerger, stating it does not affect the overall demerger scheme. In addition, the filings mentioned in the prompt flag that approval for the merchant power business demerger is pending before the NCLT under a separate proceeding, even as the broader restructuring progresses.

What shareholders receive in the demerger

The structure described in the provided material is a share-for-share distribution. For every share of Vedanta Ltd held, shareholders are expected to receive one share of each of the four newly listed companies, while continuing to hold their existing Vedanta Ltd shares.

Another line describes the demerger as being approved in a 1:5 ratio, consistent with the outcome of five listed entities after the reorganisation. The intent, as stated, is continuity of ownership while enabling direct participation in each business’s performance.

Debt allocation assumptions: how analysts are modelling the split

A key investor question is how debt will be allocated across the demerged businesses. In the note included in the prompt, the analyst assumptions for Vedanta Ltd standalone debt allocation (with Debt and Cash as of 31 Dec 2024) are:

• 70% to the Aluminium business
• 10% to Oil & Gas
• 3% to Steel and Ferrous
• 2% to Power
• 15% to the residual Vedanta Ltd

In another data point cited, Vedanta’s consolidated gross debt stood at approximately ₹73,853 crore (about $1 billion) as of March 2025.

Aluminium capacity ramp-up is central to the value-unlock thesis

Multiple references in the supplied text highlight aluminium as a key beneficiary of the demerger-led simplification. The capacity pipeline cited includes a second 1.5 mtpa alumina plant likely to be commissioned by March 2025, with ramp-up expected by Q2FY26. Based on the same note, overall alumina capacity is expected to reach 5 mtpa by the end of FY26.

Analysts covering the demerger have linked the value-unlock argument to potential aluminium price upside, cost efficiencies, and volume growth as the breakup advances.

Stock, valuation, and dividends: what the numbers show

As of 7 March 2025, the data points provided for Vedanta included a CMP of ₹445, a 52-week high/low of ₹527/₹250, and a market cap of ₹1,74,149 crore. On valuation, the note says Vedanta was trading at 4.5x EV/EBITDA on a 12-month forward (12MF) consensus basis.

On shareholder returns, the same note cites a consensus dividend per share of ₹43/₹32 for FY25/FY26, implying dividend yields of 10%/7% at the cited CMP.

Later market data in the supplied content shows Vedanta trading around ₹622, touching a 52-week high of ₹629.90 on 7 January 2026, with a market cap of ₹2,43,226.14 crore at that time, and a stated ~39% rise over one year.

Key facts table

Market impact: how the demerger narrative is influencing sentiment

The supplied text reports a ~4% rally in Vedanta shares following the NCLT approval announcement, reflecting relief after earlier regulatory objections. Brokerages have also turned more constructive in parts of the coverage: Kotak Institutional Equities upgraded Vedanta to Buy after NCLT approval and raised its target price to ₹650. Emkay Global is also cited with a Buy view and a target of ₹625, linking the thesis to Hindustan Zinc’s earnings sensitivity to silver prices and cost positioning.

For investors, the market debate remains anchored on two measurable issues highlighted in the material: the eventual debt allocation across the five balance sheets, and the ability of each listed entity to sustain capex and dividends without stressing cash flows.

What to watch next

From here, progress depends on completing remaining statutory steps and executing asset and mining lease transfers to the resulting companies. The material also indicates that certain power-related proceedings, including the merchant power business demerger, are on a separate NCLT track.

Vedanta has stated timelines pointing to FY26, with March 2026 cited as a target date. The next set of updates investors will track are further regulatory clearances, the final scheme implementation schedule, and disclosures that clarify the final debt and cash-flow mapping across the post-demerger entities.