Vedanta Gets NCLT Green Light for Major Subsidiary Demerger
Overview
Vedanta Limited has secured approval from the National Company Law Tribunal (NCLT), Mumbai Bench, for a significant restructuring scheme. The demerger plan involves separating key subsidiaries, including Talwandi Sabo Power Limited (TSPL), into distinct entities. This move aims to foster focused management, boost operational efficiency, and create unique investment opportunities for stakeholders.
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NCLT Approves Vedanta's Demerger Scheme
Vedanta Limited announced that the National Company Law Tribunal (NCLT), Mumbai Bench, has officially sanctioned a comprehensive Scheme of Arrangement involving its subsidiary companies. This pivotal decision, delivered on January 9, 2026, greenlights the restructuring of Vedanta's diverse business units, including aluminium, power, iron and steel, and base metals, into standalone entities.
Scheme Details and TSPL's Role
The approved scheme, filed under Sections 230-232 of the Companies Act, 2013, is designed to unlock value by enabling more focused management and enhancing operational efficiency across its varied operations. Notably, Talwandi Sabo Power Limited (TSPL), a wholly owned subsidiary, will absorb the Merchant Power Undertaking of the demerged company. All associated assets, liabilities, and employee obligations, including retirement benefits, will transfer to TSPL on a going-concern basis.
Strategic Rationale
This corporate reorganisation aims to provide distinct investment opportunities for shareholders and creditors, allowing each business segment to pursue its strategic objectives with greater autonomy. The move is anticipated to streamline operations and potentially unlock value that was previously obscured within a larger conglomerate structure.
Regulatory and Creditor Backing
Prior to the NCLT's final sanction, the scheme garnered overwhelming support from creditors. Meetings held in November 2025 saw approvals from 100% of secured creditors and 99.99% of unsecured creditors of TSPL. Vedanta confirmed that observations from regulatory authorities were duly addressed, ensuring compliance and smooth execution of the demerger process.
Vedanta's equity shares are listed on both the BSE and NSE. The company has assured that the scheme aligns with all relevant accounting standards and tax regulations under the Income Tax Act, 1961.
