Vedanta demerger likely by March 2026; Anil Agarwal eyes debt-free holding company, capacity doubling across businesses

The long-awaited demerger of Vedanta is likely to be completed by March 2026, setting the stage for the creation of multiple independently listed companies and a sharper focus on value unlocking across the group’s core businesses.

Speaking exclusively to CNBC-TV18, Anil Agarwal, Chairman of Vedanta Ltd, said the process should take three to four months following regulatory approvals, after the Mumbai bench of the National Company Law Tribunal (NCLT) cleared the proposed restructuring earlier this week.

“Normally, it takes three to four months. We believe that by March 2026, it should be done,” he said.

Multiple listed entities, sharper focus

The NCLT approval paves the way for Vedanta to split into five separate listed entities, including the already listed Vedanta Ltd. The move comes despite the Central government raising objections, citing concerns over recovery of dues and alleged non-disclosure of information—issues that have now been addressed as part of the tribunal process.

Once the demerger is completed, each business will operate as an independent entity with its own leadership and capital allocation strategy, allowing management teams to pursue growth and restructuring decisions best suited to their respective sectors, Agarwal said.

Debt-free target at Vedanta Resources

Alongside the demerger, Agarwal underscored the group’s focus on balance sheet strength, particularly at the holding company level.

Vedanta Resources, the UK-based parent, has already reduced its debt significantly over the past few years, and Agarwal said a structured deleveraging programme is in place to eliminate debt entirely.

“We have a very structured programme. In three to four years’ time, we will have completely paid off all the debt of Vedanta Resources,” he said, adding that the process mirrors debt reduction efforts undertaken by multinational companies globally.

The commitment to becoming debt-free is expected to ease investor concerns around leverage and improve financial flexibility as the group embarks on its next phase of growth.

Capacity doubling, value unlocking at the core

While Agarwal did not put a specific number on Vedanta’s post-demerger sum-of-the-parts valuation, he made a strong case for significant value unlocking driven by capacity expansion across businesses.

Vedanta’s current market capitalisation stands at around ₹2.2 lakh crore. Agarwal said the demerger is a “need of the hour,” given India’s scale and the strong demand outlook for raw materials.

“We are in a sector that is growing at almost double-digit rates. This is a win-win for everybody,” he said, pointing to aluminium, copper, oil and gas, zinc and other core segments.

Also Read | Vedanta NCLT Approval: Here's how the demerged entity will look like

According to Agarwal, each of Vedanta’s businesses has the potential to comfortably double production, aided by demand-supply gaps and ongoing brownfield expansion projects. He also highlighted the group’s push towards using renewable power, enabling the production of green metals.

“We are going to produce green metal, which is very, very important,” Agarwal said, adding that the company is working on higher-value products such as oxygen-free copper and specialised aluminium alloys used across industries.

Below is the excerpt of the interview.

Q: What is the expected timeline for completion of this demerger? By when can investors have the new entities listed?

Agarwal: Normally, it takes three to four months. We believe that by March 2026, it should be done.

Q: But with the demerger underway, does Vedanta now have the option of divesting or monetising an individual asset? Could steel be one such candidate that you could look to divest?

Agarwal: It’s too small to talk about that when we are looking at the big picture. Let’s talk about the big things. I know this is a process. If a demerged entity and its CEO decide what needs to be done, they have to restructure it. But I want to remain at the top level.

Q: At the top, you have actually done a good job in reducing debt at Vedanta Resources. I think that debt has nearly halved over the last few years. What are the debt reduction targets from here on at Vedanta Resources?

Agarwal: Yes, we have a very structured programme. Whatever has happened is similar to what has happened at multinational companies around the world. This is a structured programme, and in three to four years’ time, we will have completely paid off all the debt of Vedanta Resources.

Q: If you could tell us, how big is this entire value-unlocking exercise for Vedanta Ltd? The current market capitalisation is roughly around ₹2.2 lakh crore. In your view, what should be the group’s sum-of-the-parts valuation once this demerger is completed?

Agarwal: See, this is the need of the hour. India is growing with 1.4 billion people. There is no other place like this, and we are in a sector that is growing at almost double-digit rates. This is a win-win for everybody. I am looking at thousands of industries because we produce raw materials — whether it is aluminium, copper, oil and gas, zinc, or anything you talk about, we produce it. These are growing tremendously to be processed.

Each of these entities can comfortably double production because there is a demand-supply gap, and we can do brownfield expansion, which is already going on in each sectors. We are also going to produce most of our output using renewable power, which will make it green metal. We will produce green metal, which is very, very important.

We are going to produce oxygen-free copper. We are going to produce aluminium alloys that will be used across every sector. So, each sector has tremendous scope, and it is end-to-end — from mining, through three or four processes, to value addition. So, we are going to see capacity doubling in each of our businesses.

Watch the video for full conversation