Vedanta May Trim Demerger Plan To Four Units After Tribunal Blocks Talwandi Spin-Off

Vedanta Ltd. is likely to scale back its proposed demerger to four businesses, from the originally planned six, after a corporate tribunal blocked the spin-off of its power arm Talwandi Sabo Power Ltd., The Economic Times reported on Wednesday, citing sources.

On March 4, the National Company Law Tribunal dismissed the demerger of Talwandi Sabo, citing objections from Chinese firm SEPCO, which holds debt of ₹12.51 billion in the entity. The report said SEPCO accounts for over 75% of Talwandi Sabo's unsecured liabilities, effectively giving it a veto over the company's capital structure.

Vedanta had earlier secured creditor approval to proceed with a five-entity split but is now expected to retain Talwandi Sabo within the parent company and move forward with the other four, according to the report.

The company is likely to appeal the NCLT decision at the National Company Law Appellate Tribunal in Delhi. “This does not impact or alter the progress of the other business undertakings proposed to be demerged,” a Vedanta spokesperson said.

In September 2023, Vedanta had unveiled a plan to split into six separate companies representing distinct revenue streams: Vedanta, Vedanta Aluminium Metal Ltd., Talwandi Sabo Power, Malco Energy Ltd., Vedanta Base Metals Ltd., and Vedanta Iron and Steel Ltd. However, it revised this in December 2024, choosing to retain Vedanta Base Metals following lender feedback and volatility in the metals business.