Vedanta Demerger: Vedanta Limited, a constituent of the BSE 100 index, is set to remain in focus this week as the company moves ahead with a major corporate restructuring through a demerger.
The company plans to split its existing business structure into four additional entities alongside the existing, Anil Agarwal-led Vedanta company, a move that is expected to attract significant investor attention and could have an impact on its share price.
What is a Demerger or Spin-Off?
A spin-off is when a company creates a new independent company by distributing shares of an existing division to its shareholders. This is a type of demerger. In Vedanta’s case, shareholders of the parent company will receive shares in the newly created entities based on a fixed share entitlement ratio.
“In consultation with VAML, TSPL, MEL and VISL, the Board has fixed May 1, 2026, as the record date for determining the shareholders eligible to receive consideration pursuant to the Scheme,” the company said in an exchange filing dated April 20.
This means that if an investor holds Vedanta stock before the record date, they will be eligible to receive the spin-off shares.
Vedanta Demerger Structure
According to the exchange filing, during the demerger process, the single stock of Vedanta Limited will split into four additional entities:
- Vedanta Aluminium Metal Ltd (VAML)
- Talwandi Sabo Power Ltd (TSPL)
- Malco Energy Ltd (MEL)
- Vedanta Iron and Steel Ltd (VISL)
These entities will house separate business undertakings currently under Vedanta.
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Photo: ET Now DigitalVedanta Demerger 2026 (Image: AI/ET Now)
Vedanta Demerger: Share Entitlement Ratio
Here is how shareholders will receive shares under the approved demerger plan:
1. Vedanta Aluminium Metal Ltd (VAML)
VAML will issue 1 equity share of Rs 1 for every 1 Vedanta share held as consideration for the demerger of the aluminium undertaking.
2. Talwandi Sabo Power Ltd (TSPL)
TSPL will issue 1 equity share of Rs 10 for every 1 Vedanta share of Rs 1, covering the merchant power undertaking.
3. Malco Energy Ltd (MEL)
MEL will issue 1 equity share of Rs 1 for every 1 Vedanta share of Rs 1, representing the oil and gas undertaking.
4. Vedanta Iron and Steel Ltd (VISL)
VISL will issue 1 equity share of Rs 1 for every 1 Vedanta share of Rs 1, for the iron ore undertaking.
| Company | Face Value | Undertaking |
| Vedanta Aluminium Metal Ltd | Rs 1 | Aluminium |
| Talwandi Sabo Power Ltd | Rs 10 | Merchant power |
| Malco Energy Ltd | Rs 1 | Oil and gas |
| Vedanta Iron and Steel Ltd | Rs 1 | Iron ore |
What Happens to Vedanta’s NCDs?
As part of the restructuring, Vedanta will transfer its aluminium-related non-convertible debentures (NCDs) to VAML. May 1 has also been fixed as the record date to determine eligible debenture holders.
Non-convertible debentures (NCDs) are fixed-income debt instruments that pay interest but cannot be converted into company shares.
Other key changes in the Vedanta demerger
Additionally, the company will:
- Rename Talwandi Sabo Power Ltd as Vedanta Power Ltd, subject to regulatory approvals.
- Rename Malco Energy Ltd as Vedanta Oil and Gas Ltd, subject to regulatory approvals.
- Transfer its stake in Bharat Aluminium Company Ltd (BALCO) to VAML.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.
