Nuvama expects an NCLT order in December and completion of the demerger process by the end of FY26, adding that the move comes as aluminium, power, and zinc operations ramp up, costs decline, and leverage trends improve, factors which the firm says will strengthen the case for a re-rating once the demerger is executed.

On the potential for value creation post-demerger, Nuvama notes that Vedanta’s fair value is likely to see further improvement. The firm believes the demerger will unlock value by enhancing the valuation multiples of businesses such as aluminium, steel, and power. “We estimate our fair value of Rs 686 (ceteris paribus) shall be enhanced by Rs 84/share once the demerger comes into effect,” Nuvama stated.

Nuvama sees the highest rerating opportunity in Vedanta’s aluminium business. “Currently, all aluminium companies’ sensitivity to aluminium price change is 3–5%, but post-demerger, Vedanta Aluminium’s sensitivity is high at ~8%,” it said. “We believe with the demerger, the aluminium business shall command a higher EV/EBITDA multiple (6.0x-plus). Assuming an even 0.5x increase in multiple to 6.5x, the fair value is likely to be higher by Rs 36/share,” Nuvama said.

Vedanta’s iron and steel business, which includes a 1.5mtpa steel plant, along with captive iron ore, and a 10 MTPA merchant iron ore facility (7mtpa at Karnataka and 3mtpa at Goa), is also set for a rerating. Nuvama has valued this business at five times the FY28E EV/EBITDA, arriving at an enterprise value of Rs 77.9 billion (Rs 20/share). “We are factoring in FY27E/28E EBITDA of Rs 15.9bn/Rs 15.6bn. If we value the steel plant at replacement cost, the fair value could be ~Rs 109bn (Rs 28/share). This, including the iron ore business, can lead to a total enterprise value of Rs 159 billion (Rs 41/share); thus, an incremental value of Rs 21/share exists,” Nuvama said.

Nuvama is also bullish on the prospects of Vedanta’s power business, which recently signed a 500MW PPA from the Tamil Nadu Discom, with power supply starting from May 2026 for five years, setting it for a value boost. “Our current value implies power assets are valued at Rs 52mn/megawatt versus the capex of any greenfield plant of Rs 70–80mn/megawatt. We reckon the market shall still value it at a minimum of Rs 65mn/megawatt. If this happens, incremental value could be ~Rs 28/share,” Nuvama said.

Vedanta has proposed a demerger that will result in the creation of sector-specific pure play entities in aluminium, oil and gas, iron and steel, and power, while certain existing and new businesses will remain under Vedanta Ltd. The demerger is proposed as a simple vertical split, where for every share of Vedanta, a shareholder will receive one share in each of the five newly listed companies. The Mumbai bench of the National Company Law Tribunal has reserved its judgment on the demerger.

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·         Focused on unlocking value unlocking value through diversification, critical minerals, rare earths, energy transition metals, power, energy and technology.

Bengaluru, July 10, 2025: Vedanta Ltd. unveiled a vision for its next phase of growth at its 60th Annual General Meeting, with Chairman Anil Agarwal outlining a transformation plan built on demerger, diversification, and deleveraging. Backed by strong financials, record shareholder returns, and a growing portfolio of critical minerals and energy transition metals, Vedanta’s growth is aligned with India’s economic and energy ambitions. Vedanta also announced that it will incubate 1000 deep-tech start-ups. The company also reiterated its plans to establish India’s first industrial zinc and aluminium parks.

Speaking at the AGM, Chairman Mr. Anil Agarwal said, “Our 3D strategy, Demerger, Diversification and Deleveraging will enable us to double in size and unlock maximum value for our stakeholders.”

The world is seeing resource nationalism. Anil Agarwal emphasized the central role of natural resources and its significance to India’s economic future, particularly in enabling energy transition technologies like EVs and renewables, as well as digital infrastructure. With India’s geology comparable to resource-rich nations like Canada and Australia but only 25 percent explored, he said the time was ripe for accelerated growth in the critical minerals sector.

He added, “This is not just a story of growth, it is the story of realizing India’s aspirations. We are fully aligned with the needs of a developed Bharat.”

Vedanta is strategically positioned to lead this transformation. The company has secured 10 critical mineral blocks across India, one of the largest by any private sector company. This reinforces Vedanta’s transformation into a critical minerals, energy transition metals, energy, and technology conglomerate. It is also setting up the world’s first industrial Zinc Park and India’s largest Aluminium Park, aimed at nurturing thousands of MSMEs and creating lakhs of employment opportunities, marking the beginning of a metal revolution in India.

A key highlight of the AGM was the company’s demerger plan. With over 99.5 percent shareholder and creditor approval, Vedanta is in the advanced stages of executing its ‘value-unlock’ proposal. Once completed, shareholders will receive shares in each of the four newly demerged entities. Each business will have its own strategic focus, investor base, and growth path, with the potential to grow into $100 billion enterprises.

Chairman Agarwal emphasized, “Each business will get a renewed focus, new investors, and a unique opportunity to achieve its full potential.”

In line with its long-term strategy, Vedanta is also incubating future industrial champions. The company announced plans to partner with 1000 startups in deep tech space, through what is set to become one of India’s largest industrial incubator platforms in the manufacturing sector. These initiatives aim to future-proof operations and support India’s broader goals of self-reliance and economic leadership.

Mr. Agarwal also reiterated the company’s commitment to sustainability, technology, and social development. Hindustan Zinc has been ranked 1st in the global metals and mining sector, while Vedanta Aluminium is 2nd in the aluminium category in the S&P Global Corporate Sustainability Assessment 2024. The company remains committed to achieving net zero emissions by 2050. Its flagship social impact initiative, Nand Ghar, has crossed 8,500 centres across 15 states, supporting child development and women’s empowerment.

He also outlined a lifelong dream to set up a world-class educational institute in India. Mr. Agrawal further added, “This will be another pillar of our Corporate Social Responsibility initiatives. Vedanta University will be a world-class institution inspired by the likes of Harvard. This will not only bring global standards of research and education to India, but also help nurture the next generation of scientists, engineers, and leaders, all at home.”

Vedanta’s performance in FY 2024–25 has been robust, with revenues of ₹1,50,725 crore and EBITDA of ₹43,541 crore. It emerged as one of the top wealth creators in the NIFTY 100, delivering a total shareholder return of 87 percent. Hindustan Zinc is setting up a 2.5 lakh tonne integrated smelting complex with a ₹12,000 crore investment. In Oil & Gas, Cairn has acquired seven new OALP blocks and aims to double production to 3 lakh barrels per day. Aluminium capacity is being expanded to 31 lakh tonnes, with a new 30 lakh tonne greenfield smelter also planned.

The Chairman concluded by acknowledging the contribution of Vedanta’s 1 lakh strong workforce, noting that 22 percent of its workforce and 28 percent of its leadership are women, with a goal of 30 percent female representation by 2030.

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