NCLT Mumbai Sanctions Vedanta Demerger Plan
Pranav B Prem
The National Company Law Tribunal (NCLT), Mumbai Bench, has sanctioned the demerger scheme of Vedanta Ltd, approving the restructuring plan under which the metal and mining conglomerate will split its businesses into separate sector-focused entities. The order was pronounced by a Bench comprising Judicial Member Nilesh Sharma and Technical Member Charanjeet Singh.
While approving the scheme, the Tribunal observed that the material placed on record demonstrated that the proposed arrangement was fair and reasonable and did not violate any provision of law or public policy. Recording that all statutory compliances had been duly fulfilled, the Tribunal allowed the company scheme petition and granted sanction to the scheme under Sections 230 to 232 of the Companies Act, 2013.
The approved scheme of arrangement covers the demerger of four group companies—Vedanta Aluminium Metal Limited, Talwandi Sabo Power Limited, Malco Energy Limited, and Vedanta Iron and Steel Limited—along with their respective shareholders and creditors. The restructuring plan traces its origin to Vedanta’s announcement in 2023, wherein it proposed to split its Indian operations into five separately listed companies.
Under the restructuring, Vedanta proposed the creation of Vedanta Aluminium, Vedanta Oil and Gas, Vedanta Power, and Vedanta Iron and Steel, while a restructured Vedanta Ltd would continue to hold the zinc and silver businesses through Hindustan Zinc Limited and also function as an incubator for new technologies and ventures.
At the first motion stage, by an order dated November 21, 2024, the Tribunal examined the structure and rationale of the proposed scheme. It recorded that the boards of Vedanta Ltd and the resulting companies had approved the demerger between September 29, 2023, and October 13, 2023. The Tribunal also noted that Vedanta, being a listed entity, had obtained observation letters from the National Stock Exchange on July 30, 2024, and the Bombay Stock Exchange on July 31, 2024, with both stock exchanges recording no adverse remarks on the proposed restructuring.
During the first motion proceedings, an objection was raised by a party claiming creditor interest in one of Vedanta’s power undertakings, contending that the scheme could not proceed without impleading it as an applicant. The Tribunal rejected the objection, holding that at the first motion stage it was only required to issue procedural directions for convening meetings of shareholders and creditors, and that such objections were premature and not maintainable at that stage.
The Tribunal thereafter directed the convening of meetings of shareholders and creditors of the demerged entities and also ordered Vedanta to issue statutory notices to regulatory authorities, including the Securities and Exchange Board of India (SEBI), the Regional Director (Western Region), the Registrar of Companies, the Income Tax Department, and other sector-specific regulators.
Subsequently, an intervention application was filed by SEPCO in relation to Talwandi Sabo Power Limited, arising out of contractual disputes between the parties. The Tribunal later recorded that it had taken on record a settlement agreement dated September 11, 2025, between SEPCO and Talwandi Sabo Power Limited, and had permitted the demerger scheme to proceed thereafter.
At the stage of final consideration, the Registrar of Companies and the Regional Director informed the Tribunal that the replies and rejoinders filed by Vedanta had satisfactorily addressed their observations and that no objections survived. The Ministry of Petroleum and Natural Gas had earlier raised concerns relating to the post-demerger financial profile of the oil and gas business and had sought additional disclosures regarding hydrocarbon assets and associated liabilities. Vedanta informed the Tribunal that it had complied with all regulatory requirements and that SEBI had cleared the revised demerger plan after earlier disclosure-related issues were addressed.
After hearing all stakeholders, the Tribunal reserved its orders on November 12, 2025, and pronounced its decision sanctioning the scheme. With the approval granted, Vedanta is now cleared to proceed with the implementation of its demerger in accordance with the sanctioned scheme and applicable law.
Appearance
For Petitioners: Senior Advocate Ravi Kadam with Advocates Hemant Sethi, Mehul Shah, Rohan Batra, Dhruv Sethi, Adv. Yuga Kane, Rishabh Bhargava, Tanaya Sethi (PH) instructed by Anagram Partners and Khaitan and Co
For SEBI: Advocate Mohammed Lokhandwala along wth Advocate Abhishek Nair instructed by Mansukhlal Hiralal & Co
For the Government of India, MOPNG/DGH: Additional Solicitor General Brijender Chahar with Advocates Rimali Batra, Abhikesh Lalwani, Sagar Arora
For the Respondent: Advocate Altap Shaikh
Cause Title: Vedanta Ltd.
Case No: C.A.(CAA)/171(MB)2024
Coram: Judicial Member Nilesh Sharma, Technical Member Charanjeet Singh
