Anil Agarwal says newly demerged Vedanta firms have the potential to grow into $100 billion entities

Vedanta chairman Anil Agarwal, in a letter to the shareholders, said that each of the four newly demerged firms has the potential to grow into a $100 billion company.

“Post demerger, every Vedanta shareholder – both retail and institutional – will receive one new share in each of the newly demerged companies. Other than this, there will be no change in the overall shareholding structure,” the chairman further said.

“Vedanta's unique and irreplaceable assets, sector-leading position, strong global management, and financial discipline will ensure a stronger growth trajectory and higher returns going forward,” Agarwal added.

Vedanta chairman in the letter also said that while Vedanta currently contributes close to 1.4% of India’s GDP, there is a need for many more Vedantas to step forward to realise the sector’s true potential.

“Our ongoing proposed demerger would help in this direction through the creation of four new natural resource-focused entities that will have independent and empowered management, distinct capital structures, and a robust body of assets, which will additionally result in the creation of a large number of downstream industries and a huge number of new jobs,” Agarwal said.

On Monday, shares of Vedanta closed 0.94% higher at ₹447.10 per share on the National Stock Exchange. Its market capitalisation stood at ₹1.66 lakh crore.

Agarwal in the letter also said, “The world today is all about pure-play businesses, and Vedanta’s demerger will help us achieve that. Each of our demerged entities has the potential to grow into a Vedanta by itself.”

The current listed Vedanta Limited entity will continue to be a powerhouse in its own right. Among other things, it will hold over 63.4% of Hindustan Zinc, the second largest integrated producer of zinc and the third largest producer of silver in the world. Additionally, Vedanta will house growing technology businesses and continue to act as an incubator for the group, Agarwal wrote.

For Q3FY25, Vedanta had reported a 76.2% year-on-year (YoY) surge to ₹3,547 crore in its consolidated profit after tax (PAT) as compared to ₹2,013 crore in the corresponding period last fiscal year.

The profit grew on the back of higher income, which surged 9.5% YoY to ₹39,795 crore, compared to ₹36,320 crore it reported in the third quarter of the 2023-24 fiscal year (Q3 FY24).

Vedanta had also witnessed a 10.18% increase in its revenue from operations, which stood at ₹38,526 crore in the three months ended December 31, 2024, over ₹34,968 crore in the year-ago period.

The company's gross debt stood at ₹78,496 crore as of December 31, 2024.