The company announced about the development late on Friday. Shares of Vedanta had ended at Rs 462.90 on the NSE, down by Rs 9.45 or 2%.
The mining conglomerate is looking to demerge its businesses – aluminium, oil & gas, power and steel- as separate entities. At present, these businesses are subsumed within Vedanta Ltd, which is an Indian arm of UK-based Vedanta Resources.
Post the demerger, every Vedanta shareholder – both retail and institutional – will receive one new share in each of the newly demerged companies.
There will be no change in the overall shareholding structure, the letter said.
Chairman Anil Agarwal in his recently written letter to the shareholders, said that investments in the company at the start of the past 5-year period would have yielded returns of 4.7 times. The returns are a combination of capital appreciation and cash dividends, he added, claiming that metals & mining company has delivered a dividend yield of 81% during this period which is highest amongst all its peers. “Anyone who had invested in Vedanta at the start of the past five-year period would have seen their investments multiplying over 4.7 times to date, both through capital appreciation and cash dividends returned,” the letter read.”Vedanta’s unique and irreplaceable assets, sector-leading position, strong global management, and financial discipline will ensure a stronger growth trajectory and higher returns going forward. The tremendous potential value unlock that the demerger will bring has also been captured well by many top
brokerages and leading analysts,” the letter said.
In a recent vote of shareholders, secured and unsecured creditors, 99.5% of shareholders and creditors voted in favour of our demerger.
Agarwal said that he envisions each of the four newly demerged companies to potentially grow into a $100 billion company.
The Vedanta chairman also said that the company is currently contributing close to 1.4% of India’s GDP.
Vedanta, which was listed on Indian exchanges in 1998, will hold over 63.4% of Hindustan Zinc (HZL).
HZL is an integrated producer of Zinc and silver.
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