Vedanta considers a full group overhaul to unlock value


Vedanta, led by Anil Agarwal, today revealed plans for a full corporate structure overhaul and the company plans to list its aluminum, iron and steel, and oil and gas businesses as separate entities.

“The Board has decided that, considering the scale, nature, and potential opportunities for the company’s various business verticals, it should conduct a comprehensive review of the corporate structure and evaluate a full range of options and alternatives, including spin-offs and spin-offs to unlock value and simplify the corporate structure, “the company said in a statement.

The Board of Directors has also formed a committee of directors to evaluate and recommend such options and alternatives, Vedanta said.

On Wednesday, Vedanta shares rose 1.64% to close at 338.20 in NSE.

The strategic objectives outlined by the Board to undertake such an exercise are the simplification and rationalization of the corporate structure, unlocking value for all stakeholders, and the creation of businesses that are better positioned to capitalize on their different positions in the market and generate growth through long term and allow strategic partnerships.

Vedanta has also appointed several advisers to help the Board evaluate the options.

“In recent years, the group has materially improved the operating performance of the businesses, increased cash flows, reduced debt and, at the same time, focused on accelerating investments in energy transition, health and safety, diversity and ESG in general, “said Vedanta President Anil Agarwal. said.

“This step, which we announced today, pending a detailed evaluation, is designed to create independent, industry-leading global public companies, where each can benefit from increased focus, personalized capital allocation and strategic flexibility to drive growth. long-term. and value for customers, investors and employees, “Agarwal further said.

The company expects the restructuring to result in a tailored capital structure and capital allocation policies based on specific business dynamics.

Vedanta is also looking at different investment profiles to attract deeper and broader investor bases; and accelerate emission reduction and sound ESG practices.

“We will continue to leverage our significant strengths in technology, operations and people to better serve our customers and all stakeholders,” Vedanta’s president said in a statement.

According to the restructuring being evaluated, Vedanta Ltd and three companies will operate in parallel, Agarwal later told the PTI news agency.

“All three businesses have great growth potential and we believe that the model being evaluated will provide natural avenues for growth and enhance shareholder value,” he said.

Giving an example, he said that a Vedanta shareholder will have 4x shares once the plan is approved and implemented, both from Vedanta and the three companies.

“This is the global model and if you look even at the Indian industry, you will find that Hindalco is a separate company and so is Tata Steel. And we can do the same,” he said.

“The idea is to do it as soon as possible. I cannot give a deadline, but it will be very soon,” he said.

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