Vedanta Demerger: Share Price Adjusts, Four New Companies Head To Market

Wednesday was a big day for Vedanta. The mining major put a concrete timeline on its long-awaited demerger and reported the best quarterly numbers in its history, all in the same investor call.

Vedanta Resources Chief Executive Officer Deshnee Naidoo told investors on the Q4 call that the demerger is in its final stage. Exchange filings for listing approval go in next week. Shares of the resulting companies are expected to list and start trading by mid-June, which means the whole exercise lands within the first quarter of FY27.

Vedanta Ltd shares closed at ₹773.60 on Wednesday, near its 52-week high of ₹795 and well above the 52-week low of ₹399. On 30 April, the shares opened at ₹289.50 on the NSE, appearing to have dropped nearly 63% overnight.

What Is Happening To The Share Price

Shares of Vedanta Ltd will trade ex-demerger value from today after a special pre-open session. The stock may appear sharply lower, but this only reflects the adjustment for the four demerged businesses.

The special pre-open session will run from 9:15 am to 9:45 am on stock exchanges. This window will help discover the adjusted price. Normal trading in the stock will start at 10 am.

Reports have put an indicative post-adjustment range of ₹300 to ₹325 for Vedanta shares, noting that the final number depends on how net debt is distributed across the demerged entities.

Demerger Nearly Done

The record date for the demerger is 1 May. Shareholders holding one share of Vedanta as of 29 April will receive four additional shares of the new companies when they list.

Chief Financial Officer Ajay Goel confirmed the board had approved the demerger effective 1 May. The structure creates five independent sector-specific companies. Four of them will be separately listed:

• Vedanta Aluminium Metal Limited

• Talwandi Sabo Power Ltd

• Malco Energy Ltd

• Vedanta Iron and Steel Limited

Each entity gets its own board, its own balance sheet and its own investor base. The idea is that investors who want exposure to aluminium, power or steel can own exactly that rather than a conglomerate that bundles everything together.

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The Q4 Numbers

• Profit after tax: ₹9,352 crore, up 89% year-on-year (YoY).

• Revenue: ₹51,524 crore, up 29% YoY.

• Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA): ₹18,447 crore, up 59% YoY.

• EBITDA margin: 44%, up 915 basis points YoY.

A profit after tax jump of 89% year-on-year in a single quarter is a significant number for any company. For Vedanta, it comes at the same moment the demerger is reaching its conclusion, which makes the timing particularly clean for the stock.

Sources:

Money Control

Economic Times