Vedanta Group Has Recently Secured Interim Relief On The TSPL Demerger Case

Vedanta Limited has recently secured interim relief from NCLAT in the Vedanta TSPL (Talwandi Sabo Power Limited) demerger case. This turns out to be a positive sign for the Vedanta Group's upcoming plans to demerge its business. With this, the group aims to ensure that its business operations get carried out as planned. The group will also be able to acquire the maximum value out of its demerger plan. 

NCLAT Grants Interim Relief On The TSPL Demerger Case:

Vedanta Limited has recently made an announcement that the National Company Law Appellate Tribunal (NCLAT) has granted an interim stay on the earlier order, which was passed by the National Company Law Tribunal (Vedanta NCLT), Mumbai, which stayed the company's proposed demerger plan involving Vedanta TSPL. Now this appears to be a great win for Vedanta Limited. Once the group receives the approval for the demerger, it will be able to ensure that its exact goals are achieved. The group will also be able to walk the path towards success.

A Brief Background Of The Vedanta NCLT Case:

On 4th March 2025, the Vedanta NCLT Mumbai had stayed the first motion application for the demerger of Vedanta's power generation business into TSPL. This was done citing material non-disclosures under section 230 (2)(a) of the Companies Act 2013. According to the news, NCLT found that the company had not disclosed its contractual obligations towards SEPCO, which happens to be a Chinese contractor involved in the Vedanta TSPL power plant project. Post that, a lot of controversies were held in this matter, causing the NCLAT to grant interim relief on the case.

The Grant Of Interim Stay On The Order:

Vedanta appealed the order. According to the Vedanta Limited, the contract with SEPCO was terminated in February 2024 because of the non-performance of the company. The liability was also written back and disclosed in the FY24 financials. The group also mentioned that the NCLT exceeded its jurisdiction by rejecting the scheme at the first motion. At this, Vedanta NCLT has agreed to hear the matter in detail. It has also granted an interim stay on NCLAT's rejection of the scheme.

The matter is already scheduled for a detailed hearing on 4th August 2025. The stay ensures that parallel proceedings concerning the demerger of other units are not adversely affected. However, even during the controversies, Vedanta has reiterated its commitment to its reorganization plan, which is aimed at enhancing focus and maintaining transparency across the verticals. This move is seen as a strategically crucial part of the Vedanta Limited’s plan to streamline its corporate structure and list individual business units.

Vedanta Limited’s Plans To Demerge Its Business:

Vedanta Limited had earlier proposed the plan to demerge its business into five different entities on a global scale. The major reason behind carrying out this demerger is to increase its focus on core business sectors like supplying of oil & gas, aluminium, iron ore, copper, zinc, silver and power. Post the demerger, the Vedanta’s management will be able to further streamline its various business operations. It will also be able to make more efficient use of assets and leverage opportunities for itself.

The demerger scheme has emphasized that over time, each of the independent companies will start attracting new investors, strategic partners, lenders, and stakeholders. This will further lead to the expansion of the group's business. It will also allow the investors to separately hold investments in businesses with different investment characteristics and market potential. This will also open up new opportunities for them. However, the demerger can only be carried out as planned after the Vedanta NCLT approval is received.

The companies that will be formed as a part of the departure include:

● Vedanta Limited, which would include the world's largest integrated zinc producer and fourth-largest silver producer, Hindustan Zinc.

● Vedanta Aluminium, one of the largest aluminium producers in the world.

● Vedanta Oil and Gas, India's largest private sector crude oil producer.

● Vedanta Power, one of the largest power generators of India

● Vedanta Iron and Steel, a company with an extremely scalable ferrous portfolio.

As per the Vedanta officials, the demerger scheme will also enable focused and greater capital market access. This will unlock greater value for the demerged entities.

Conclusion:

With the successful completion of the demerger plan, the Vedanta Group will be able to take one step towards ensuring that its business operations are further streamlined. The group will also be able to earn an enhanced revenue from its business, thereby allowing the company to reach new heights.