Vedanta demerger: A deep dive into five new entities of the metals giant

Vedanta shares are in focus on Wednesday, following the NCLT’s approval of Vedanta’s demerger. The demerger was first announced in 2023 and now looks to be taking place with all necessary regulatory approvals. The exchange filing by Vedanta read, “With this approval and subject to receipt of certain government, regulatory approvals and other stakeholder clearances, Vedanta enters the execution phase of a transformational demerger that will result in five separate listed companies (including already listed Vedanta Limited), each with a clear strategic mandate, focused management teams, and dedicated capital structures".

The demerger is designed to unlock long-term value for shareholders and provide investors direct exposure to high-quality, sector-leading assets aligned with India’s growth and global energy transition trends. It represents a significant step in simplifying Vedanta’s corporate structure while strengthening accountability, transparency, and strategic clarity across the Company’s businesses.

As existing investors rejoice at the demerger plan look forward to the record date announcement, here is a brief overview of the new entities of Vedanta.

Vedanta Aluminium

Vedanta Aluminium is a group with a strong market presence and, dominant market share in the aluminium mining in the country. The company is India’s largest aluminium miner with ~46% market share, with assets like the Jharsuguda smelter in Odisha. It is the world’s largest single-location aluminium (ex-China). The company generates 45%-50% of the group’s EBITDA, underscoring its significance in the group. As of Q2FY26, the aluminium giant reported EBITDA of ₹5,532 crore, up by 33% YoY, with the $943 per tonne margin, the highest in fourteen years. Post the de-merger, the aluminium business will be in focus owing to its strong financials, market share dominance and the potential value creation.

Vedanta Oil & Gas

After Aluminium, the oil and gas entity is the second most significant entity with strong financials. The company reported revenue of ₹2,330 crore in Q2FY26 and the EBITDA of ₹1,029 crore. The company produces 89.3 kboepd, which is declining naturally. It Rajasthan asset block remains the core asset for the company, contributing 70.9 kboepd. The oil & gas entity’s share price movement will be highly linked to price movements in crude oil prices.

Vedanta Power

The power business remains at an early stage, but with a high growth outlook, with capacity additions. The power entity holds the Talwandi Sabo Power Ltd plant in Punjab as the primary asset, which holds a capacity of 1,920 MW. The long-term power-purchase agreement with the government remains its sole revenue contributor. As of Q2FY26, the company achieved its highest-ever quarterly power generation of 3,889 million units, up 7.9% YoY. The company will remain under the investor’s radar for its transition from a steady entity to an aggressive expansion engine.

Vedanta Iron & Steel

The entity will focus on being a key player in iron and steel manufacturing, bringing together iron ore, steel, and value-added ferrous operations, providing a vertically integrated platform with scope for downstream expansion and green steel initiatives. The entity’s saleable ore production from Karnataka and Goa mines jumped 11% to 2.9 million tonnes in Q2FY26. The entity is the smallest amongst the five businesses and holds a small capacity compared to the steel giants like JSW Steel and Tata Steel.

Vedanta

The main company will continue to hold 65% stake in Hindustan Zinc and focus on new age businesses like semiconductor, display fab production. This entity remains a key player post demerger, owing to its ‘high-yield’ status and working as an incubator for the emerging businesses that have strategic importance to India.

In conclusion, the demerger process of Vedanta is surely expected to unlock value for the shareholders with new entities listing separately. The de-merged entities will also carve out a path of their own with a sharp focus on the respective sectors and align themselves with evolving market dynamics. Having said that, the residual entity will also remain in focus owing to its strong dividend yield, focus on new and emerging business, and as a holding company.