Vedanta Group Chairman Anil Aggarwal has announced the date of demerger of his companies. On Monday, April 20, the company told the stock exchanges (BSE-NSE) that the process of dividing Vedanta Limited into five parts will become effective from May 1. After this demerger, shareholders will get 1-1 share of the new companies for every share of Vedanta. Vedanta Group will be divided into 5 listed companies. Vedanta Limited will now operate as five separate listed companies from May 1. In this, the main company Vedanta Limited will have the business of base metals. Apart from this, four new companies – Vedanta Aluminium, Talwandi Sabo Power, Vedanta Steel and Iron and Malco Energy will come into existence. Shareholders will get 4 new shares in exchange for 1. According to the demerger plan, every investor holding one share of Vedanta Limited till the record date will get one free share each of the four new companies. Name and face value of these companies will change. After the demerger, the name of Talwandi Sabo Power will be changed to ‘Vedanta Power Limited’ and the name of Malco Energy will be changed to ‘Vedanta Oil and Gas Limited’. Talking about face value, the face value of shares of Talwandi Sabo Power will be Rs 10, whereas the face value of shares of all other new companies has been kept at Rs 1 per share. BALCO and debentures will also be transferred. Four non-convertible debentures (NCDs) related to Vedanta’s aluminum business will now be transferred to Vedanta Aluminium. For this the company has fixed May 1 as the record date. Along with this, Vedanta’s stake in Bharat Aluminum Company (BALCO) will also be handed over to Vedanta Aluminium. Market cap expected to be more than $27 billion Chairman Anil Agarwal had said in an interview last month that the total market capitalization of these five companies will be much more than the current $27 billion. He also clarified that a private parent company controlled by the Agarwal family will continue to hold about 50% stake in all these new companies. Target of listing by mid-May According to the company’s CFO Ajay Goyal, Vedanta’s target is to list these four new units in the Indian stock markets by mid-May. The National Company Law Tribunal (NCLT) had approved this demerger plan in December last year itself. However, the government had initially opposed this plan because it feared that it might create problems in recovery of dues. Zinc and Silver Business: After the demerger, the zinc and silver business will remain with the parent company Vedanta Limited through Hindustan Zinc. Also, this company will work as an incubator for new ventures. Let us tell you that at the time of news on April 20, Vedanta shares had fallen 2.2% and closed at ₹ 770. What is demerger and what effect does it have on shareholders? Demerger: When a big company divides its different businesses into independent companies, it is called demerger. This helps in better focus on each business. Impact on shareholders: Shareholders get shares of new companies in the ratio of their old holding. This increases the value of their portfolio and investment options. Also read this news… RBI removed restrictions on rupee trade: Now Forex dealers will be able to take positions in NDF market; The ban was imposed in March. On April 20, Reserve Bank of India i.e. RBI has withdrawn some of the restrictions imposed on foreign exchange dealers (Forex Dealers) to prevent the instability of the rupee. Now dealers will be able to take positions again in the offshore non-deliverable forward market (NDF). A few days before RBI took this step, Governor Sanjay Malhotra had indicated that these restrictions would not remain in force indefinitely. Read the full news…
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Vedanta’s demerger to be effective from May 1: Investors will get shares of 4 companies for 1; Companies will be listed by mid-May
