Vedanta’s long-awaited demerger is no longer just a boardroom plan—it has crossed its biggest legal hurdle and is now firmly in “execution mode.” The Mumbai bench of the National Company Law Tribunal (NCLT) has sanctioned Vedanta Ltd’s revised demerger scheme, clearing the way for the resources major to split into multiple sector-focused listed companies. [1]
On December 22, the story has widened beyond corporate restructuring. A record surge in silver prices has propelled Hindustan Zinc—Vedanta’s key listed subsidiary and a major silver producer—to fresh highs, reviving investor attention on how the “new Vedanta” (the residual parent company) could be valued once the group breaks into purer plays. [2]
At the same time, Vedanta Group chairman Anil Agarwal has again spotlighted dividends, telling PTI that payouts will remain central even after the split—an important signal for a shareholder base that has increasingly viewed Vedanta as a high cash-return stock. [3]
Below is what’s new as of 22 December 2025, what the NCLT order really changes, what shareholders are expected to receive, and why metals—especially silver—are adding momentum to the demerger narrative.
What the NCLT approval means: the demerger is cleared in principle, but conditions still apply
The NCLT’s order is a watershed because it confirms the tribunal’s view that the scheme meets the Companies Act framework for such restructurings—and it dismisses objections raised against the plan. Bar & Bench reported that the NCLT sanctioned the scheme under Sections 230–232 and rejected applications opposing it. [4]
One of the most closely watched objections came from the Ministry of Petroleum and Natural Gas (MoPNG), which had raised concerns around oil-and-gas assets, liabilities, and disclosure. In the order, the tribunal records that Vedanta complied with disclosure requirements and that MoPNG’s objections were “adequately addressed.” [5]
However, this is not a “tomorrow morning” demerger. The sanction is tied to specific compliance steps. The order directs that certain conditions be fulfilled within two months of the order or before the scheme becomes effective, whichever is earlier—including (a) releasing charges created over fixed assets and updating the same on the Registrar of Companies (RoC) site, and (b) furnishing a corporate guarantee on behalf of the relevant resulting entity (MEL) consistent with Vedanta’s undertaking. [6]
In plain English: NCLT approval clears the roadblock, but execution depends on paperwork, filings, and follow-on approvals—especially where regulated assets and security interests are involved.
Vedanta’s revised structure: five listed companies, each meant to be a “pure play”
The core idea behind Vedanta’s restructuring is to separate unlike businesses—metals, oil & gas, and power—so each can be valued on its own financial profile rather than being bundled into a single “conglomerate discount.”
Vedanta’s own December 16 press release lays out the post-demerger structure as five listed companies:
- Vedanta Aluminium
- Vedanta Oil & Gas
- Vedanta Iron & Steel
- Vedanta Power
- Vedanta Limited (the residual parent entity, continuing to house the stake in Hindustan Zinc Limited and incubate future-facing businesses) [7]
This is broadly aligned with how major global resources groups are often valued—investors can benchmark a pure aluminium producer differently from an upstream oil producer or a power generator, rather than forcing a single multiple across radically different cash-flow cycles. [8]
A key nuance: the power business has a separate proceeding
Both the company’s press release and retail explainers note that the power (merchant power) separation has been going through a separate NCLT process. [9]
The NCLT order itself references that a separate company scheme application was filed for the merchant power undertaking due to the relevant company’s registered-office change process, underscoring that the “power” leg of the demerger has procedural complexity. [10]
What Vedanta shareholders get: the 1:1 entitlement is the headline
For existing shareholders, the big question is simple: “What do I receive, and in what ratio?”
The scheme’s design is a shareholding replication model. The NCLT order records that the non-implementation of an earlier “Part V” (from the original plan) does not alter entitlements for the other parts, and confirms a 1:1 share entitlement ratio for the demerger of the aluminium, merchant power, oil & gas, and iron ore undertakings. [11]
Vedanta has also stated that shareholders will receive equity shares in each of the four resulting listed entities (in addition to retaining Vedanta Ltd shares) in proportion to their existing holdings, ensuring continuity of ownership across the split. [12]
Retail explainers published after the NCLT nod have repeated the same essential point: ownership doesn’t disappear—it gets distributed across multiple listed companies. [13]
Why the demerger is back in the spotlight on Dec 22: metals are running, and silver is doing the heavy lifting
While the demerger is a structural story, the market’s day-to-day enthusiasm is being fuelled by the commodities tape—and in December 2025, the tape has been loud.
Business Standard’s view: commodity cycle + demerger progress + expansion = rally triggers
Business Standard highlighted multiple drivers behind Vedanta’s momentum: progress on the multi-entity demerger, a strong non-ferrous cycle boosting margins, and a renewed “silver bull” narrative around Hindustan Zinc. It noted aluminium and zinc were up 7% and 13% quarter-on-quarter for the October–December period, and that silver prices were up 32% quarter-on-quarter—a mix that can materially change earnings expectations for metal-heavy groups. [14]
The same piece also pointed to capacity expansion—such as commissioning 435 KTPA smelting capacity at Balco—as part of the longer-term operating leverage story. [15]
Today’s market hook: Hindustan Zinc jumps as silver prints fresh records
On December 22, silver’s rally turned into a headline event.
- The Economic Times reported Hindustan Zinc shares hit a fresh 52-week high, with silver reaching about $68/oz internationally and around ₹2,13,844/kg on MCX in India. [16]
- Moneycontrol reported silver futures (March expiry) pushing above ₹2.14 lakh/kg, and global spot silver moving above $69/oz at one point—highlighting how fast-moving price discovery has become. [17]
For Vedanta investors, this matters because the residual Vedanta entity is expected to continue housing the Hindustan Zinc stake, and silver’s growing contribution can influence how that “parent + HZL” base is valued post-demerger. [18]
“Dividend is in my blood”: why payout expectations are part of the demerger trade
A large slice of Vedanta’s investor following—especially in India—has increasingly focused on dividends. That’s why the “dividend signal” has become a major part of the demerger conversation.
On December 22, “stocks to watch” coverage cited Anil Agarwal reiterating that dividends will remain central even after the split, framing the demerger as a way to sharpen focus and unlock value while keeping cash returns flowing alongside capex. [19]
In the PTI interview carried by ET platforms, Agarwal pointed to dividend payouts already declared in FY 2025–26, including:
- ₹7 per share first interim dividend (totaling ₹2,737 crore)
- ₹16 per share second interim dividend (totaling ₹6,256 crore) [20]
He also said group capital expenditure ambitions remain large—PTI reporting a planned $20 billion investment over 4–5 years across businesses, with a detailed split across oil & gas, aluminium, zinc & silver, power, and iron ore/steel. [21]
The real investor question: can dividends and capex coexist after the split?
That is likely to be the defining debate as the market moves from “approval” to “execution.”
In a demerged structure, each company will have its own board, capital structure, and payout policy. A high-dividend legacy does not automatically translate into identical payout behaviour across four new listed entities—particularly in capital-intensive segments like oil & gas or large-scale metals expansion. Still, Agarwal’s message is clearly aimed at calming concerns that the demerger will dilute cash returns. [22]
The legal and regulatory fine print investors should not ignore
Beyond the broad “five-way split” headline, the NCLT record includes details that can influence timelines and perceived risk—especially for the oil & gas leg.
MoPNG concerns and the corporate guarantee
The tribunal documents directions tied to MoPNG’s concerns, including updating records related to the removal of charges and furnishing a corporate guarantee mechanism linked to MoPNG-related liabilities if the relevant resulting entity fails to satisfy them. [23]
That matters because the government’s earlier pushback had centred on recoverability and safeguards in the hydrocarbon business, and the demerger could have been delayed further without a path to address those concerns. [24]
“Execution phase” doesn’t mean “effective date”
Vedanta itself has stressed that while NCLT approval is a major milestone, the split still requires further implementation steps, compliance with securities laws, and additional regulatory/stock exchange approvals and filings for listing the resulting companies. [25]
So, investors should expect a flow of:
- RoC/charge-related filings
- stock exchange updates
- record dates and procedural milestones
- potential clarifications on debt allocation, inter-company arrangements, and transitional services
Timeline: why March 2026 is the market’s working assumption
The market’s central planning date is March 2026.
Reuters reported that Vedanta aims to complete the split by March 31, 2026, after shareholders and lenders had approved the plan earlier, and that the demerger had faced government resistance before NCLT clearance. [26]
The PTI interview carried by ET also referenced the March 2026 timeframe. [27]
That date matters for two reasons:
- Valuation positioning: Investors may attempt to price “sum-of-the-parts” value ahead of listing and trading in the new entities.
- Policy and capital decisions: Commodity cycles can shift quickly; the longer the runway, the more earnings and capex assumptions may evolve.
Debt: the question the demerger cannot dodge
Every major demerger ends up being a debate about where the debt sits.
Reuters noted Vedanta’s consolidated borrowings stood at ₹259.38 billion at the end of September 2025. [28]
Separately, PTI reporting carried by ET platforms quoted Agarwal saying debt would be allocated to demerged entities based on their respective cash flows (with a figure cited in that coverage). [29]
Investors will likely watch for:
- explicit debt transfer terms to each resulting company
- refinancing plans (if any entity inherits shorter maturities)
- how credit ratings and funding costs evolve when businesses stand alone
What to watch next: the practical checklist for investors and readers
As of December 22, the story has shifted from “Will NCLT approve?” to “How cleanly will Vedanta execute?”
Key milestones to track over the coming weeks and months:
- Compliance with NCLT conditions (RoC updates, release of charges, corporate guarantee-related steps) [30]
- Progress on the power/merchant power leg that has been referenced as a separate proceeding/process [31]
- Debt allocation and capital structure disclosures for each resulting company [32]
- Record dates and listing timelines for the four new listed entities [33]
- Commodity price direction, especially silver and zinc (via Hindustan Zinc) and aluminium (a key driver for Vedanta’s margins and expansion narrative) [34]
The bottom line on Dec 22: a demerger story powered by commodities—and investor expectations
Vedanta’s demerger has a credible legal green light, a clear “pure play” blueprint, and a straightforward shareholder entitlement concept that keeps ownership continuous. [35]
What makes the story particularly “alive” on December 22, 2025 is the market backdrop: silver has surged to record levels, lifting Hindustan Zinc and reinforcing the argument that a simpler group structure could help investors see—more directly—where the earnings power sits. [36]
But as with any multi-entity restructuring, the biggest swing factors now are execution quality, debt placement, and whether each resulting company can balance growth capex with shareholder returns in a way that matches the high-dividend expectations the group has cultivated. [37]
References
1. www.barandbench.com, 2. m.economictimes.com, 3. upstox.com, 4. www.barandbench.com, 5. images.assettype.com, 6. images.assettype.com, 7. www.vedantaresources.com, 8. infra.economictimes.indiatimes.com, 9. www.vedantaresources.com, 10. images.assettype.com, 11. images.assettype.com, 12. www.vedantaresources.com, 13. www.indmoney.com, 14. www.business-standard.com, 15. www.business-standard.com, 16. m.economictimes.com, 17. www.moneycontrol.com, 18. www.vedantaresources.com, 19. upstox.com, 20. infra.economictimes.indiatimes.com, 21. infra.economictimes.indiatimes.com, 22. upstox.com, 23. images.assettype.com, 24. www.livemint.com, 25. www.vedantaresources.com, 26. www.reuters.com, 27. infra.economictimes.indiatimes.com, 28. www.reuters.com, 29. infra.economictimes.indiatimes.com, 30. images.assettype.com, 31. www.vedantaresources.com, 32. infra.economictimes.indiatimes.com, 33. www.vedantaresources.com, 34. m.economictimes.com, 35. images.assettype.com, 36. m.economictimes.com, 37. upstox.com
