Vedanta shares rise after demerger approval from shareholders and creditors

Shares of Vedanta Ltd surged 1.99 per cent on February 21 after the company secured approval from its shareholders and creditors for its proposed demerger into five separate entities. The stock reached an intraday high of Rs 442.2 on the BSE, marking its fifth consecutive session of gains. Year-to-date, Vedanta shares have advanced over 7 per cent, significantly outperforming the broader market.

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Demerger details and market response

Vedanta’s restructuring plan involves splitting the company into five distinct listed entities, Vedanta, Vedanta Aluminium Metal, Talwandi Sabo Power Limited, Malco Energy, and Vedanta Iron and Steel. Initially, the company had proposed six separate entities but revised the plan at the beginning of 2025, deferring the base metals business demerger.

The demerger resolution was overwhelmingly supported by shareholders and creditors, with 99.99 per cent of participating shareholders and 99.95 percent of lenders voting in favor. The move is expected to streamline operations and enhance value for stakeholders by providing more focused and independent management to each segment.

Stock performance and investor sentiment

By 9:45 AM, Vedanta’s share price was trading at Rs 441.05 on the BSE, up 1.73 per cent. In contrast, the BSE Sensex was down 0.28 per cent at 75,521.24. The company’s market capitalization stood at Rs 1,72,467.67 crore. The stock has fluctuated within a 52-week range of Rs 249.75 to Rs 527, reflecting the company’s dynamic market trajectory.

Over the past year, Vedanta shares have gained an impressive 60 per cent, significantly outpacing the Sensex’s 4 per cent rise. This strong performance signals investor confidence in the company’s restructuring plan and future growth potential.

Fundraising and strategic outlook

In addition to the demerger, Vedanta successfully raised Rs 2,600 crore through the issuance of non-convertible debentures (NCDs). The company allotted 2,06,000 rupee-denominated unsecured, redeemable, rated, and listed NCDs of Rs 1 lakh each, aggregating to Rs 2,060 crore (Series 1). Another 54,000 NCDs, aggregating to Rs 540 crore (Series 2), were also issued, reinforcing the company’s financial position.

Path ahead for Vedanta

With the demerger approved, Vedanta will focus on optimizing operational efficiencies across its newly formed entities. The management aims to drive long-term value creation by enhancing governance structures and pursuing sector-specific growth strategies. The stock's recent rally indicates strong investor optimism, with market participants closely monitoring the execution of the restructuring plan.