Vedanta Stock Hits 52-Week High on Demerger Buzz 2025

Introduction to Vedanta's Market Performance

Vedanta Ltd, the diversified natural resources conglomerate backed by billionaire Anil Agarwal, has seen its stock price reach a new 52-week high of Rs 616 per share on the BSE. This significant rally, occurring in late December 2025, reflects strong investor confidence, primarily fueled by the company's strategic plan to demerge its core businesses. Despite facing tax-related penalty orders, the market sentiment remains overwhelmingly positive, with the stock demonstrating remarkable resilience and upward momentum. As of the latest trading session, Vedanta's shares were trading at Rs 613.95, marking a 2.23% increase and pushing its market capitalization to Rs 2,40,254.24 crore. The stock has surged over 38% year-to-date, signaling a robust performance that has captured the attention of the investment community.

The Strategic Demerger Plan

The central catalyst for Vedanta's recent stock surge is its ambitious demerger plan, which has received approval from the National Company Law Tribunal (NCLT). The company intends to split its operations into five separate, sector-specific listed entities. This restructuring is designed to unlock value by allowing each business to pursue its own growth strategies, attract targeted investments, and operate with greater agility. The demerger will result in the creation of independent companies focused on distinct commodity markets, a move that management believes will enhance operational efficiency and shareholder returns. The timeline for the completion of this complex corporate restructuring has been extended to the end of March 2026.

Breakdown of the New Entities

Post-demerger, Vedanta's business verticals will be housed in five separate listed companies. This structure is intended to provide investors with more direct exposure to specific commodity cycles and business models. The five entities will be:

• Vedanta Aluminium: Focusing on the company's extensive aluminum operations.
• Vedanta Oil & Gas: Managing the exploration, extraction, and processing of oil and gas assets.
• Vedanta Iron & Steel: Overseeing the iron ore and steel manufacturing businesses.
• Vedanta Power: Handling the company's power generation facilities.
• Vedanta Limited (Parent): The existing entity will continue to hold the company's stake in Hindustan Zinc Ltd. and incubate new, future-facing businesses.

This strategic separation is expected to create a more transparent and focused corporate structure for each vertical.

Impact on Shareholders

The demerger will directly impact existing shareholders of Vedanta Limited. According to the approved plan, for every one share of Vedanta Ltd they hold, shareholders will receive one share in each of the four newly listed companies. This 1:5 ratio ensures that investors retain their ownership across the diversified portfolio while gaining the flexibility to manage their investments in each specific sector independently. This move is seen as a way to provide direct participation in the growth trajectories of the individual businesses. The record date for determining eligible shareholders for the share allocation will be announced closer to the completion of the demerger process.

Analyst Recommendations and Price Targets

Market analysts have responded positively to Vedanta's strategic initiatives and strong fundamentals. ICICI Direct has maintained a 'BUY' rating on the stock with a target price of Rs 650. Their optimism is based on robust non-ferrous metal prices, strategic expansions in the aluminum and zinc segments, and an attractive dividend yield of around 6%. Similarly, analysts at Emkay Global Financial Services have also expressed a bullish outlook, setting a target price of Rs 625 for the stock. These recommendations are supported by the company's strong management efficiency, reflected in a Return on Capital Employed (ROCE) of 31.42%, and a healthy debt-to-EBITDA ratio of 1.20, indicating manageable debt levels.

Favorable Commodity Outlook for 2026

The positive sentiment around Vedanta is further bolstered by favorable forecasts for the global commodity markets. Industry reports suggest that aluminum is expected to remain in a deficit in 2026, which is likely to drive prices higher. This trend directly benefits Vedanta, which operates India's largest primary aluminum capacity at approximately 2.8 million tonnes per annum. Furthermore, ongoing supply constraints in the silver market are expected to sustain higher prices. This is particularly advantageous for Vedanta's subsidiary, Hindustan Zinc, which is India's largest silver producer with a refining capacity of around 800 metric tonnes. As silver is a by-product with minimal processing costs, higher prices directly boost profitability for both Hindustan Zinc and its parent, Vedanta Ltd.

Conclusion: A Value-Unlocking Restructure

Vedanta's stock rally to a 52-week high is a clear indicator of market approval for its strategic demerger. By separating its core businesses, the company aims to unlock significant value and create more focused, agile entities capable of capitalizing on specific market opportunities. While the completion timeline has been extended to March 2026, the combination of a clear strategic direction, strong financial fundamentals, positive analyst ratings, and a favorable outlook for key commodities positions Vedanta for potential long-term growth. Investors and market observers will be closely watching the execution of this transformational restructuring in the coming months.