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Vedanta Ltd shares surge 5% following major business restructuring announcement

Image Source : PTI/FILE PHOTO Vedanta Chairman Anil Agarwal during an MoU signing ceremony between Vedanta-Foxconn Group and Government of Gujarat.

Shares of Vedanta Ltd witnessed a notable surge of 5 percent on Tuesday, following a significant announcement regarding a major business shake-up. At the Bombay Stock Exchange (BSE), the stock experienced a robust increase of 4.98 percent, reaching a price of Rs 233.60. On the National Stock Exchange (NSE), it climbed by 5 percent, reaching Rs 233.75.

The conglomerate led by mining magnate Anil Agarwal unveiled a substantial business restructuring plan on Friday. As part of this strategic move, Vedanta’s flagship company has given the green light to spin off its metals, power, aluminum, and oil and gas businesses into separate listed entities. Additionally, an overhaul of its lucrative zinc unit is planned, aiming to create value and reduce the company’s debt burden.

Vedanta announced that for every share held in the company, shareholders will receive one share in each of the five demerged businesses. This demerger process, contingent upon approvals from shareholders, lenders, stock exchanges, and courts, is expected to be concluded within 12 to 15 months, as stated by Ajay Agarwal, the President of Finance at Vedanta.

The board of Vedanta approved this strategic move on Friday, highlighting its objective to “demerge business units into independent ‘pure play’ companies to unlock value and attract big-ticket investment for their expansion and growth.” This initiative underscores Vedanta’s commitment to creating shareholder value and optimising its diverse portfolio of businesses.

Investors have responded positively to this announcement, signaling their confidence in the potential benefits and value creation expected from this business restructuring.

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