NCLT Mumbai reserves order on Vedanta’s demerger proposal; petroleum ministry cites concerns
The Mumbai bench of the National Company Law Tribunal has reserved its verdict on the proposed Vedanta demerger, which is opposed by India’s ministry of petroleum and natural gas.
“We have heard both sides. The matter is reserved for orders,” the newly constituted bench, comprising Justices Nilesh Sharma and Charanjeet Singh Gulati, said orally after hearing the application on Wednesday. Vedanta, 230-232 of the Companies Act. It is seeking regulatory approval for the proposed spin-off under its articles.
During the hearing, the Ministry of Petroleum and Natural Gas expressed concerns about potential financial risks following the demerger of Vedanta, misrepresentation of the country’s hydrocarbon assets and inadequate disclosure of liabilities. The ministry’s objections in court created a major obstacle to the division.
Vedanta Group, led by billionaire Anil Agarwal, has announced a plan to split its operations in India into five separate publicly traded companies in 2023: Vedanta Aluminum, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron and Steel, and a restructured Vedanta Ltd, which will retain its zinc and silver businesses (through Hindustan Zinc) and serve as an incubator for new technologies and startups.
The proposed spin-off aims to reduce the company’s debt by focusing on creating independent businesses and delivering value to stakeholders.
Additional solicitor general Brijender Chahar, representing the ministry, said the court should take into account adequate protection of the interests of the Indian government while passing the order.
“As a sector regulator, this is our primary concern,” Chahar said.
Sebi approval
Vedanta opposed the ministry’s objections. He informed the court that he had already received approval. After market regulator Securities and Exchange Board of India revised the demerger plan in line with regulatory requirements. Vedanta argued that even though the ministry is the sectoral regulator, it is neither a creditor nor a stakeholder of the company.
“We don’t have to fulfill some wish list given by MoPNG; we have to fulfill legal deficiencies, if any,” said Ravi Kadam, senior counsel representing Vedanta.
Vedanta has postponed the demerger date to March 2026 from the earlier target of September 2025, citing expected approvals from NCLT and government officials.
“Vedanta remains committed to the proposed demerger, which aims to create independent, sector-specific entities in aluminium, oil and gas, power and iron and steel,” a company spokesman said on Wednesday.
