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The Chairman of Vedanta, Anil Agarwal said that , “By demerging our business units, we believe that will unlock value and potential for faster growth in each vertical. While they all come under the larger umbrella of natural resources, each has its own market, demand and supply trends, and potential to deploy technology to raise productivity,”
Yesterday, On 29th September Vedanta ltd announced the creation of it’s independent verticals followed by the demerger of underlying companies, mainly distributed into metals, power, aluminum, and oil and gas businesses to unlock potential value.
Accordingly, The company plans to separate the listed entities, into:
• Vedanta Aluminium : Largest capacity in India with captive power and an alumina refinery. This business will continue to house coal and bauxite mines. This will also include the 51 percent stake the company owns in BALCO.
• Vedanta Oil & Gas: The Cairn business, which will be India's largest private sector crude oil producer.
• Vedanta Power : Will be one of India's largest private sector power generators.
• Vedanta Steel and Ferrous Materials: Will be one of India's largest private sector exporters of Iron Ore including Sesa Iron Ore, Sesa Coke, WCL (Liberia) and a 95.95 percent stake in Electrosteel Steel.
• Vedanta Base Metals: Will have a diversified portfolio of international base metal assets including ones in Tuticorin, Fujairah Gold, Silvassa and VZL.
• Vedanta Limited: The currently listed entity will house the manufacturing of LCD and Display glass, the semiconductor business, the stainless business and the stake in Hindustan Zinc.
This demerger was announced after the market closed on Friday. Vedanta which is owned by Billionaire Anil Agarwal unveiled the establishment of these independent verticals which has even received the approval of it’s Board of Directors
As per the company’s filing this strategic move will lead to a robust expansion by attracting more and more investors and will lead to substantial value. In addition to this Anil Agarwal also stated that this is the big announcement for Vedanta and India both. The Country is already on a growth trajectory and is on it’s way to become the third largest economy. This can raise the demand while reducing the reliance on imports.
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