Vedanta's punch will create a stir in the market, Anil Agarwal is in big preparations

Anil Agarwal, chairman of Vedanta Limited, which operates in industries ranging from mining to metals, said on Wednesday that the target for completing the separation of various businesses is March 2026, after which five independent, listed, and sector-specific companies will emerge. 

Agarwal said that the separation will provide opportunities for growth to each of Vedanta's businesses, and each newly formed company will have the potential to be equal to its parent company. 

The NCLT approved Vedanta's business separation plan on Tuesday. Under this plan, the base metals business will remain with Vedanta Limited, while Vedanta Aluminium, Talwandi Sabo Power, Vedanta Steel & Iron, and Malco Energy will be the other four independent companies.

Target set for March

Agarwal said that Vedanta is like a giant banyan tree. Every business has immense potential, and each business can become a banyan tree. My vision is that every company should grow in revenue at par with Vedanta. In effect, we are creating five more Vedantas, which will benefit shareholders. 

He said that the business separation process is expected to be completed in the next three to four months, with a target date of March 2026. 

When asked about the rationale for the business separation, Agarwal said that most large resource companies globally operate in specialized businesses, and this restructuring is in line with that model.

All companies will have separate accounts

Under the business split, every Vedanta shareholder will receive one share of each newly formed company for every share they currently hold. 

Each new company will have an independent board of directors and professional management. Promoters will retain approximately 50 percent stake but will not be involved in day-to-day operations. 

The Vedanta chairman stated that the company's total debt is approximately ₹48,000 crore, which will be distributed based on the cash flow of each new company after the business split. 

Outlining plans for various businesses, Agarwal said copper and silver production will be increased, aluminum capacity will be doubled, and oil and gas production is targeted to reach 1 million barrels per day in the next four to five years.

Dividend and Capex Policy

Additionally, the steel and iron ore business will focus on green steel production, and the power business will expand to 20,000 MW of capacity. 

Regarding capex and dividend policies, Agarwal stated that aggressive capex will continue even after the business separation, along with regular dividends. 

He stated that the business separation will not only provide each business with an independent identity, but will also drive investment, production, and innovation in Indian industry.