Vedanta Shares Trade In Green On Demerger Plan; Here's What You Should Know

Vedanta shares traded in the green on Tuesday (October 3) after the mining giant announced its demerger plan via an announcement last week. Since then the company's shares have been on investors' radar as the move comes as a big development wherein Vedanta will demerge its business units into six listed entities. In today's early morning trade, the stock almost surged 4% indicating a strong buying of the company's shares.

At 10 am IST today, the share price of Vedanta Limited was up 2.22% at Rs 227.45 per share. Vedanta shares were spotted trading at Rs 231.6 per share at 9:16 am IST today.

In an exchange filing on September 29, 2023, the company said, "The Board of Directors of the Company has at their meeting held earlier today, approved a Composite Scheme of Arrangement for the demerger of the Aluminium Undertaking, Merchant Power Undertaking, Oil and Gas Undertaking, Base Metals Undertaking and the Iron Ore Undertaking of the Company into five wholly owned subsidiaries of the Company ("Scheme"). Subject to approvals, the demerger process is expected to be completed by FY25.
According to the company, the demergers are expected to unlock significant value for the Vedanta shareholders.

The six independent listed companies include Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Ltd.

It is worth mentioning that Vedanta Ltd shareholders will receive one share in each of the five newly listed companies, for every one share they hold in the currently listed entity.

The merger will not only simplify Vedanta's corporate structure with sector-focused independent businesses but is also expected to attract strategic investment.

As per the June quarter shareholding pattern, Vedanta owns a 64.92% stake in Hindustan Zinc. Last week, in an exchange filing, Hindustan Zinc said, "We wish to inform you that the Board of Directors of the Company, at their meeting held on September 29, 2023, have authorized Committee of Directors (CoD) to evaluate appropriate corporate restructuring exercise to unlock shareholder value."

On Monday, the world's second-largest integrated zinc producer released results for the second quarter and half year ended September 30, 2023.

The share price of Hindustan Zinc was down 1.41% at Rs 304.45 per share at 9:54 am IST.