Mumbai | December 16, 2025 — Vedanta Ltd’s long-awaited demerger plan has crossed its biggest legal hurdle after the Mumbai bench of the National Company Law Tribunal (NCLT) sanctioned the group’s restructuring scheme on Tuesday, clearing the way for the Anil Agarwal-led metals-to-oil conglomerate to split into five sector-focused, separately listed businesses. [1]
The decision ends months of uncertainty created by objections from the Ministry of Petroleum and Natural Gas (MoPNG), which argued the proposed breakup could complicate the government’s ability to recover dues linked to Vedanta’s oil and gas operations and raised questions on hydrocarbon disclosures, liabilities, and the financial profile of the post-demerger oil and gas entity. [2]
Markets reacted swiftly. Vedanta shares rose sharply in late trade, with reports across platforms pegging the intraday gain at roughly 2.5% to 4% and the stock touching fresh highs during the session as investors priced in a clearer path to the breakup. [3]
What the NCLT approved on December 16
In its oral pronouncement, the Mumbai NCLT bench said “The sanction to the company scheme is granted,” allowing Vedanta to proceed with the proposed demerger plan that the company first announced in 2023. The written order was not yet posted at the time of early reports. [4]
Legal coverage of the matter described the approval as sanctioning a scheme of arrangement under Sections 230 to 232 of the Companies Act, and said the scheme covers the demerger of four group companies — Vedanta Aluminium Metal, Talwandi Sabo Power, Malco Energy, and Vedanta Iron and Steel — along with their respective shareholders and creditors. [5]
The tribunal bench cited in multiple reports comprised Judicial Member Nilesh Sharma and Technical Member Charanjeet Singh (also referenced as Charanjeet Singh Gulati in some coverage). [6]
Vedanta’s “five firms” structure: what emerges after the split
Vedanta’s restructuring is designed to transform the sprawling conglomerate into five focused, sector-leading listed entities, broadly aligned to major verticals:
- Vedanta Aluminium
- Vedanta Oil & Gas
- Vedanta Power
- Vedanta Iron and Steel
- A restructured Vedanta Ltd, which will continue to hold the group’s zinc and silver exposure through Hindustan Zinc and act as an “incubator” for new technologies and ventures [7]
A key change versus Vedanta’s earlier blueprint is the treatment of base metals. The group had originally planned to split into six entities, including a separate base metals company, but under the revised scheme the base metals business will remain within Vedanta Ltd rather than being carved out into its own listed unit (keeping the overall outcome at five entities). [8]
Why this demerger matters: value unlocking, focus, and “conglomerate discount”
Vedanta has consistently framed the demerger as a move to simplify a complex corporate structure and allow each vertical to be valued more transparently on its own financial and operating metrics. The company and market commentators have pointed to three core aims:
- Sharper management focus through vertical-specific leadership and capital structures
- Debt and capital allocation clarity across cash-generating and investment-heavy units
- Potential value unlocking by reducing the “conglomerate discount” that can weigh on diversified groups [9]
One analyst estimate cited in Mint—attributed to Nuvama Research via a November 23 BusinessLine reference—suggested the demerger could unlock value of about ₹84 per share across Vedanta’s verticals by improving transparency and enabling independent valuation of each business. [10]
The biggest hurdle: petroleum ministry objections, RJ block dispute, and disclosure demands
While Vedanta’s demerger has navigated board approvals, stock exchange processes, and regulatory reviews over time, the most consequential resistance in recent months came from the Ministry of Petroleum and Natural Gas.
MoPNG’s core concern: recoverability of dues and liabilities
MoPNG’s objections, as reported across outlets, centred on the potential impact of the demerger on the government’s ability to recover dues tied to oil and gas operations and the adequacy of disclosures around hydrocarbon assets and associated liabilities. [11]
Moneycontrol and NDTV Profit also referenced the government flagging pending claims of around ₹16,700 crore in connection with the dispute, adding to the regulatory overhang that delayed the final clearance. [12]
Malco Energy: liquidity risk allegations
A central flashpoint was Malco Energy Ltd, the Vedanta subsidiary expected to emerge as a separate entity after the restructuring. Mint reported MoPNG argued Malco faced serious liquidity risk, citing negative net worth of ₹94 crore as of March 31, 2024, and cash losses of ₹85.64 crore in FY24 and ₹244 crore in FY23, warning the entity could “in all probability” slip into liquidation—making recovery of government dues “virtually impossible.” [13]
The RJ block: ₹5,600 crore partial arbitral award cited
Mint also reported the ministry highlighted a long-running dispute linked to Vedanta’s RJ oil and gas block in Rajasthan, including a partial arbitral award involving ₹5,600 crore in dues. According to the report, the matter is pending before the Delhi High Court, where orders have been reserved. [14]
Vedanta’s position: compliance and locus standi
Vedanta pushed back on the objections, telling the tribunal it had revised its scheme in line with regulatory requirements and secured clearance from SEBI after earlier disclosure-related issues. The company also argued that while MoPNG is a sectoral regulator, it is not a creditor or stakeholder and therefore lacks locus standi to oppose the scheme before the tribunal. [15]
How the case reached this point: key timeline milestones
The NCLT approval on December 16 follows a long procedural runway:
- September 2023: Vedanta’s board approved the demerger plan. [16]
- November 21, 2024: At the “first motion” stage, NCLT examined the structure and rationale and set procedural directions, according to legal coverage. [17]
- July 30–31, 2024: The plan received observation letters from NSE (July 30) and BSE (July 31) noting no adverse remarks, per LiveLaw’s reporting. [18]
- September 11, 2025: NCLT took on record a settlement agreement involving SEPCO and Talwandi Sabo Power, removing a key contractual dispute overhang, per LiveLaw. NDTV Profit also reported SEPCO withdrew arbitration claims linked to the power business. [19]
- November 12, 2025: NCLT reserved its order after extensive hearings. [20]
- December 16, 2025: NCLT sanctioned the scheme, enabling the next stage of implementation. [21]
Stock market reaction: Vedanta shares surge as demerger overhang lifts
Vedanta’s stock moved higher after news of the NCLT nod broke, with different reports capturing the move at different points in the session:
- NDTV Profit reported the share price advanced about 4% intraday to ₹571.35, noting the benchmark Nifty 50 was down ~0.7% and that traded volume was about three times the 30‑day average. [22]
- Mint reported shares reversed a decline and gained about 2.5% to ₹563.90 on the BSE around 2:55 pm. [23]
- Moneycontrol reported the stock rose up to 3.5% following the tribunal approval. [24]
- The Economic Times cited an ET Now report and said shares hit a 52-week high of ₹571.35 on the NSE during the spike. [25]
The differing figures reflect intraday volatility and publication timing, but the direction of travel was consistent: the NCLT ruling removed a major procedural uncertainty that had weighed on the stock through 2025. [26]
What happens next: execution steps and the road to listing the new entities
Tuesday’s NCLT sanction is a pivotal milestone—but not the finish line. With the written order still awaited in initial reporting, Vedanta must now move through the formal implementation sequence typical for schemes of arrangement, including regulatory filings and steps required for listing and trading of the demerged entities. [27]
The company has publicly signalled it will now proceed with “necessary steps” to implement the scheme, according to statements carried by market coverage. [28]
Importantly, Vedanta had previously pushed back its demerger timeline after missing earlier targets, and Mint reported the company set March 2026 as its completion goal following delays tied to approvals. That timeline will now be watched closely as investors look for clarity on effective dates, record dates, and when the new listings could reach the market. [29]
The bottom line
Vedanta’s NCLT victory on December 16, 2025 is a defining development for one of India’s most closely watched corporate restructurings—one that blends capital markets strategy with the realities of sectoral regulation in critical industries like hydrocarbons.
By overcoming MoPNG’s objections and securing tribunal sanction, the group has moved from “proposal” to “execution mode,” setting up a high-stakes next phase where timelines, compliance, debt allocation, and investor communication will determine whether the breakup delivers on its promise of sharper focus and value unlocking. [30]
References
1. www.livemint.com, 2. www.livemint.com, 3. www.livemint.com, 4. www.livemint.com, 5. www.livelaw.in, 6. www.livelaw.in, 7. www.livelaw.in, 8. www.livemint.com, 9. www.livemint.com, 10. www.livemint.com, 11. www.ndtvprofit.com, 12. www.moneycontrol.com, 13. www.livemint.com, 14. www.livemint.com, 15. www.livemint.com, 16. www.ndtvprofit.com, 17. www.livelaw.in, 18. www.livelaw.in, 19. www.livelaw.in, 20. www.livelaw.in, 21. www.livemint.com, 22. www.ndtvprofit.com, 23. www.livemint.com, 24. www.moneycontrol.com, 25. m.economictimes.com, 26. www.moneycontrol.com, 27. www.livemint.com, 28. www.moneycontrol.com, 29. www.livemint.com, 30. www.livemint.com
