Vedanta Demerger: 5 Firms Eye $100B Each

The Vedanta Group has finalized its significant demerger, resulting in four distinct businesses—oil and gas, power, aluminium, and iron & steel—now independently listed on stock exchanges. Chairman Anil Agarwal expressed confidence that each of the five publicly traded companies could evolve into a $100 billion entity, citing substantial demand-supply gaps in their respective sectors. He highlighted the group's strategic focus on establishing import substitute businesses, a principle that has guided their development in critical areas like aluminium, zinc, oil and gas, and nuclear power.

Agarwal emphasized the group's commitment to creating value through sustainable job creation, noting that Vedanta directly and indirectly employs millions. The company's annual tax contribution is approximately ₹60,000 crore. Looking ahead, Vedanta intends to foster downstream industries by supporting around 400 companies to develop products from primary metals. The group plans to maintain a liberal dividend policy, with each company's board determining payout specifics, reinforcing their commitment to shareholder value. Their cost-competitiveness globally supports this strategy.

Regarding specific ventures, Agarwal indicated a hopeful approach to reviving the Thoothukudi copper plant in Tamil Nadu, anticipating collaboration with the new state government. He downplayed the loss of Jaiprakash Associates as a business norm. For the aluminium sector, Vedanta aims for full bauxite ore self-sufficiency within months through operationalizing two large mines. The oil and gas division is set for significant expansion with a $5 billion capex plan over three years, funded internally, targeting increased exploration and production. The iron and steel business aims for a 15 million tonne capacity expansion in the next three years through brownfield projects.