December 18, 2025 — Vedanta Ltd (NSE: VEDL, BSE: 500295) is back in the spotlight after its long-awaited demerger cleared a major legal hurdle, triggering a sharp re-rating conversation across Dalal Street. The stock has been trading around the ₹580 zone on December 18 after touching a fresh all-time high near ₹580.45 earlier this week, as investors position for what could become one of India’s most-watched corporate break-ups in 2026. [1]
What’s different this time is not just price momentum—it’s the mix of catalysts behind it: the NCLT’s approval, improving clarity on the five-way split, and a wave of brokerage upgrades and target hikes that now frame Vedanta as a “value-unlock plus cash-flow carry” story—with big caveats around debt allocation, commodity cycles, and governance. [2]
What happened this week: NCLT clears Vedanta’s demerger plan
The Mumbai bench of the National Company Law Tribunal (NCLT) has sanctioned Vedanta’s scheme of arrangement for a demerger—an approval the company disclosed via stock exchange filings dated December 16, 2025. [3]
The five listed companies Vedanta is working toward
Vedanta’s own disclosure/press release describes a post-demerger structure that results in five separately listed companies (including the existing listed Vedanta Ltd). The businesses identified are:
- Vedanta Aluminium
- Vedanta Oil & Gas
- Vedanta Iron & Steel
- Vedanta Power
- Vedanta Limited (to continue as the parent entity, housing Hindustan Zinc and “future-facing” incubations) [4]
There’s an important nuance that explains why some reports list entities like Talwandi Sabo Power and Malco Energy instead of “Vedanta Power” and “Vedanta Oil & Gas.” Several outlets describe the legal “resulting companies” in the scheme as specific corporate entities—Vedanta Aluminium Metal, Talwandi Sabo Power, Malco Energy, and Vedanta Iron and Steel—which correspond to the operating verticals that investors think about more simply as aluminium, power, oil & gas, and iron & steel. [5]
Another nuance: power demerger still has a separate legal thread
Vedanta’s filing also flags that approval for the merchant power business demerger is pending before the NCLT under a separate proceeding, even as the broader demerger structure moves into execution mode. This is likely to remain a “watch this space” factor because power cash flows and debt capacity can look very different depending on final structure and conditions. [6]
What happens next: record date, share entitlement, listings
From here, the process becomes less headline-driven and more paperwork-driven—but the paperwork is the price.
Market watchers expect the company to proceed through stock exchange-related steps and announce a record date. Investors holding Vedanta shares as of that record date are expected to receive one share in each demerged listed entity for every one Vedanta share held (in addition to retaining their Vedanta Ltd shareholding). [7]
Vedanta and multiple reports have guided the market to a March 2026 completion ambition for the split (a timeline that’s later than earlier guidance). [8]
Why Vedanta stock is moving: the “conglomerate discount” trade is back
The cleanest bull thesis being pushed right now is simple: conglomerates often trade at a discount because investors can’t easily assign peer multiples to a bundle of unrelated businesses. Break the bundle apart, and you might remove that discount—assuming the balance sheets and governance of the new entities are credible.
Moneycontrol’s December 18 analysis frames the pre-demerger valuation gap at roughly a 10–15% discount to sum-of-the-parts estimates, largely linked to complexity and capital allocation opacity, with the demerger expected to improve transparency—again, assuming debt and cash-flow mapping is handled well. [9]
Broker targets and forecasts: where the Street is leaning right now
1) Kotak: upgrade to “Buy,” target raised to ₹650
Kotak Institutional Equities upgraded Vedanta to Buy and raised its price target to ₹650, with commentary pointing to supportive commodity pricing, commissioning/ramp-up of key assets, and easing concerns tied to promoter-level debt. [10]
2) Emkay: “Buy,” target ₹625; sees upgrade potential driven by silver + costs
Emkay has reiterated a Buy call with a ₹625 target. One notable part of the current Emkay narrative is that silver upside and cost advantages—particularly via Hindustan Zinc’s operating leverage to silver—can drive earnings upgrades versus consensus. [11]
3) Nuvama: target ₹686; EBITDA growth expectations into FY28
Nuvama’s target cited in market coverage sits at ₹686, backed by expectations of EBITDA growth across FY25–FY28E driven by lower aluminium costs, volume growth and commodity price assumptions. [12]
4) Citi: sees value as split approaches; debt and governance remain in focus
Citi’s read (as carried by ET) is broadly constructive on value potential from the demerger as it narrows the conglomerate discount—while also explicitly keeping debt, dividend sustainability, and governance under the microscope as the process moves from “approval” to “execution.” [13]
5) What consensus trackers imply: wide range, modest average upside
Consensus aggregators still show a broad spread. For example, Investing.com’s analyst-based projections show a high estimate around ₹686 and a low around ₹480, with the average clustered in the mid-₹500s. [14]
Translation: optimism is real, but it’s not unanimous—and price targets depend heavily on assumptions about commodity prices and how the new balance sheets are engineered.
The real operating story: commodities, costs, and the Hindustan Zinc “silver lever”
Vedanta is effectively a bundle of commodity exposures—so even the best demerger story still lives and dies by metal prices, costs, and volumes.
Silver and zinc: why Hindustan Zinc matters so much
Hindustan Zinc (majority owned) is central to Vedanta’s cash-flow narrative in many brokerage models—both because of its base zinc/lead economics and because rising silver contribution can change the earnings slope. [15]
Emkay’s site-visit-based commentary highlighted output and renewable energy-mix trajectories at Hindustan Zinc that feed into longer-run margin and re-rating assumptions. [16]
Aluminium: scale is a strength, but it’s a power-and-input-cost chess game
Multiple broker notes (as summarized in market coverage) point to aluminium as a key EBITDA engine, with upside tied to alumina costs, captive integration, and the commissioning/ramp-up of assets. [17]
Power: improving visibility, but debt capacity is the key question
Power is where investors may want the most details before celebrating. Moneycontrol’s December 18 piece stresses that while power segment visibility has improved with capacity additions, the bigger question is whether the standalone entity can comfortably carry its share of debt early on, especially if utilization ramps gradually. [18]
Debt, dividends, and the “carry trade” appeal—plus the hard questions
Debt allocation is the make-or-break variable
With the demerger, the market will stop debating whether Vedanta deserves a conglomerate discount and start debating whether each resulting company has a sustainable standalone capital structure.
Mint’s explainer highlights that investors will be watching how Vedanta allocates debt across the five entities because it shapes post-demerger balance-sheet health (and therefore valuation multiples). [19]
Moneycontrol (Dec 18) also lists debt allocation, capital discipline, and cash conversion as the primary triggers that can push valuation either direction from here. [20]
Dividends: attractive, but sustainability matters more than the headline yield
Vedanta’s stock has long attracted investors looking for dividends. Current market commentary continues to reference forward dividend yield expectations in the mid-single digits as a support factor during the demerger transition. [21]
But dividends in commodity businesses are not “set and forget.” They depend on:
- commodity cycles (especially aluminium and zinc/silver),
- capex requirements,
- and debt servicing—at both the listed company and promoter/holdco ecosystem.
The other current Vedanta news investors are also tracking
Critical minerals: Vedanta wins Genjana nickel–chromium–PGE block
Earlier in December, Vedanta disclosed it was declared the successful bidder for the Genjana Nickel, Chromium and PGE block under India’s Critical Mineral Auctions (Tranche III), positioning it more directly in the “energy transition materials” narrative. [22]
This isn’t likely to move FY26 earnings overnight—but it adds strategic optionality, which markets tend to like when balance sheets are under control.
Big capex intent: $20 billion investment plan mentioned by chairman
Separate reporting also cites Vedanta’s chairman indicating plans to invest $20 billion in India over 4–5 years across businesses—an ambitious growth posture that can be read as either bullish (expansion runway) or cautious (capex vs deleveraging trade-off), depending on execution. [23]
Key risks: what could derail the rally
Even if you love the demerger story, this is not a “risks are over” situation. The big ones:
- Execution and timelines: demergers create value when they finish cleanly, list on schedule, and show credible standalone numbers. Slippage can reignite the discount. [24]
- Debt and guarantees: conditions, charge releases, guarantees, and the final debt map matter as much as the headline “five-way split.” [25]
- Government claims/objections history: reports note prior government objections and pending claims (including a cited figure of ₹16,700 crore in one report), even though the NCLT has now cleared the plan. [26]
- Governance overhang: earlier in 2025, Vedanta and its promoter group faced renewed scrutiny after a short-seller report; Vedanta Resources disputed the allegations, and the episode remains part of the background risk framing for some global investors. [27]
- Commodity volatility: aluminium, zinc, and silver can make earnings look brilliant or brutal depending on global prices—especially when the market is paying up for “better structure” at the same time. [28]
Bottom line on Vedanta stock on 18 Dec 2025
Vedanta’s demerger has moved from “maybe someday” to an execution runway with a legal green light—one of the biggest reasons the stock is being repriced around the ₹580 level this week. [29]
The near-term Street stance is broadly constructive: multiple brokerages have reiterated or upgraded Buy ratings with targets clustered from the ₹625 zone up to ₹686, based on (1) demerger-led transparency, (2) commodity tailwinds, and (3) improving leverage optics—while repeatedly warning that the real test will be debt allocation, power cash-flow durability, and governance comfort once the “one stock” story becomes “five balance sheets.” [30]
References
1. www.livemint.com, 2. nsearchives.nseindia.com, 3. nsearchives.nseindia.com, 4. nsearchives.nseindia.com, 5. www.business-standard.com, 6. nsearchives.nseindia.com, 7. www.livemint.com, 8. www.livemint.com, 9. www.moneycontrol.com, 10. m.economictimes.com, 11. www.business-standard.com, 12. www.vedantalimited.com, 13. m.economictimes.com, 14. www.investing.com, 15. www.business-standard.com, 16. www.business-standard.com, 17. www.moneycontrol.com, 18. www.moneycontrol.com, 19. www.livemint.com, 20. www.moneycontrol.com, 21. www.moneycontrol.com, 22. www.business-standard.com, 23. m.economictimes.com, 24. www.livemint.com, 25. www.moneycontrol.com, 26. www.moneycontrol.com, 27. www.reuters.com, 28. www.moneycontrol.com, 29. nsearchives.nseindia.com, 30. www.moneycontrol.com
