Vedanta Demerger: Company to be divided into 5 parts from April 1; What will shareholders get and when will the listing happen?
Vedanta Demerger: Vedanta Ltd, led by veteran industrialist Anil Aggarwal, is going to launch its big demerger next month. According to recent statements by the company’s Chairman and CFO, Vedanta Group is now in the final stages of splitting into 5 separate listed companies. The main objective of this step is to reduce the huge debt of the group and bring out the unique value (Value Unlocking) of each business.
What is the new timeline of demerger?
According to Vedanta CFO Ajay Goyal, the demerger process will start from next month. After this, the process of listing of new companies in the stock market will start. Let us tell you that in December, a tribunal had approved the plan to split this group, which does business from oil to metal, into five listed entities.
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Which will be those 5 new companies?
After the restructuring, the existing structure of Vedanta Limited will change and these 5 new companies will be formed.
– Vedanta Limited: Base metals (Zinc, Lead, Silver) and Hindustan Zinc will have stake in it.
– Vedanta Aluminum: Aluminum Business.
– Vedanta Oil & Gas: Oil and gas business of Cairn India.
– Vedanta Power: Business of power generation (Talwandi Sabo Power).
– Vedanta Steel and Iron: Iron and steel sector.
When will the listing happen?
The company’s CFO Ajay Goyal had said in an interview with Reuters in January that Vedanta aims to list these four new companies on the Indian stock exchanges by mid-May.
What will the shareholders get?
Vedanta has fixed the ratio of 1:1 for shareholders. This means:
If you hold 1 share of Vedanta Limited (VEDL), after the demerger you will have a total of 5 shares of 5 different companies. You will get 1-1 share of every new company for free. You do not need to make any separate application for this, these shares will be automatically credited to your demat account.
Anil Aggarwal believes that the total market value of these 5 companies will be much more than the current Vedanta ($27 billion). The debt of about ₹ 48,000 crore existing on the company will be distributed among all these 5 companies according to their cash flow and assets. Anil Aggarwal has assured investors that the tradition of giving dividends will continue even after the separation of the companies. He recently said, Dividend is in my blood.
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