Five baby Vedantas will step into stock exchanges in May, three to bear most debt load

Mumbai: The five companies born of the Vedanta Ltd demerger may debut on the stock exchanges as early as May, company executives said on Thursday, with three of them bearing the parent company's $6.7 billion debt burden.

Billionaire Anil Agarwal-led Vedanta received the much-awaited nod for its mega-demerger from the National Company Law Tribunal in December, over two years after the plan was floated. On Thursday, the Vedanta management said the demerger will take effect on 1 April, and the company aims to have the shares of the new companies listed by as early as May, and definitely before the end of June. The comments were made at Vedanta's quarterly earnings call when it reported record revenue and profit.

Vedanta will split itself into five independent, listed businesses: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron and Steel and Vedanta Ltd itself that will house the zinc and silver businesses under subsidiary Hindustan Zinc and act as an incubator for new technology and business opportunities.

Vedanta is yet to finalize which resultant company will bear how much debt; however, each resultant company will get a share of Vedanta’s ₹60,624-crore net debt based on the value of their assets and their cash generation abilities, as approved by the company’s lenders, the management said.

“Broadly, net debt in Vedanta... at about $6.7 billion, will get apportioned in the ratio of assets that each entity will carry post-de-merger (and) each entity's cash generation and debt-serving ability,” Ajay Goel, president and chief financial officer said during the call.

Vedanta Aluminium will take the lion’s share of the company’s debt burden, while some debt will go to Vedanta Power, Goel said. The remaining debt will be on the books of Vedanta Limited, he said, without disclosing the exact debt distribution.

Interestingly, no debt has been apportioned to the Vedanta Oil and Gas, the company that will handle the group’s oil exploration and production business post-demerger, Goel said. Similarly, next to no debt will be borne by Vedanta Iron and Steel, which will house the group’s iron ore mines and steel plant under ESL Ltd.

"These are slow-growth businesses of the Vedanta Group and their balance sheets would not have been able to absorb high debt. It is better to keep them debt-free and run their operations. So, I would say this is positive as all businesses demerge with healthy balance sheets," said Amit Lahoti, lead analyst for metals and mining at Emkay Institutional Equities.

Record Q3 profit

Vedanta reported its best-ever quarterly profit in the December quarter at ₹7,807 crore, which was 60% higher year-on-year.

Revenue for the quarter too was at a record ₹45,899 crore, nearly a fifth more than the preceding year. Unsurprisingly, earnings before interest, tax, depreciation and amortization (EBITDA) too were at a record level of ₹15,171 crore, up by a third from last year.

“Q3 FY26 has been a landmark quarter for Vedanta, delivering our highest-ever Ebitda of ₹15,171 crore, with two of our businesses achieving their best-ever financial results,” executive director Arun Misra said in a statement.

The aluminium business posted its strongest Ebitda margin of $1,268 per ton, supported by record alumina and aluminium production, Misra said. The zinc and silver business in India under Hindustan Zinc too recorded its highest-ever quarterly Ebitda of ₹6,064 crore, he added. The silver rally shored up Hindustan Zinc’s finances, accounting for 44% of the total profit.

“Alongside the landmark approval for the demerger into five pure-play entities, these results demonstrate our strong operational momentum and readiness to unlock long-term value as we advance Vedanta’s 2.0 journey,” Misra said.