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Metals and mining magnate Anil Agarwal on Friday said that he is considering listing all or some of its businesses separately to unlock shareholder value. Agarwal, Chairman of London-based parent Vedanta Resources, leads a group of companies ranging from metals and mining to oil and gas and potentially chipmaking.
He said he would take a call based on feedback from advisors as reorganisation could see better returns and dividends for investors.
In a video message to shareholders, Agarwal said the company has a diversified presence in oil and gas, metals and mining, and a separate listing of different businesses will help them grow many folds.
“I have asked all my advisors and my people can we have all products (businesses that Vedanta operates) or some products to be independent,” Agarwal said in a video message posted on YouTube.
“If you have one share of Vedanta Ltd, you will have many shares of other companies and people will have an opportunity to invest in different areas. Some international companies want to invest in a particular area, they will get that opportunity.”
Agarwal said he will seek shareholders’ views on the proposal and the reorganisation could see better returns and dividends for investors.
“Vedanta, in last two decades, has gone into the business which is more and more import substitute; very difficult for the entry into these areas. We have the business of oil and gas, the largest producer of aluminum, completely integrated power, copper, zinc, silver, lead, iron and steel, nickel, ferroalloys, semiconductor, display glass and more,” he said.
The plans stand in contrast to Agarwal’s attempts in 2020 to delist Vedanta Ltd to expedite the process of simplifying its corporate structure, which failed.
In November 2021, Agarwal had first spoken about a possible rejig of the corporate structure through demergers, spin-offs, and strategic partnerships. He said that the move was being considered in a bid to simplify and streamline the corporate structure, unlock value for all stakeholders, and create businesses that are positioned better to capitalise on their distinct market positions and deliver long-term growth and enable strategic partnerships.
In recent months, Vedanta Resources has been trying to raise funds. The credit rating agencies have downgraded its outlook citing funding risks and concerns about meeting debt obligations.
“The whole world is looking to invest in India. I have been told that investors like pure play,” Agarwal said in his video message today.
“I have asked all my advisors and my people to look (if we) can have these all products or some products to be independent, so the independent management and leadership can grow this business to the highest level,” he added.
The demerger will help them remain focused on the core business.
Also, this will offer investors an opportunity to invest in sectors and companies of their liking.
He, however, set no timeframes for the decision.
Agarwal’s group of companies has presence in India, South Africa, Namibia, Liberia, UAE, Korea, Taiwan, and Japan.
In June 2023, the company announced that it was expanding into Semi-conductors and Display Glass.
According to a company release, the acquisition will be effected by way of a share transfer at face value of Twin Star Technologies Limited’s Semiconductor and Display SPVs.
The plan is the same as what port-to-energy conglomerate Adani Group did in 2015 when the ports, power and electricity transmission businesses were carved out of Adani Enterprises and listed separately.
Subsequently, a renewable energy firm and a gas utility too was created where Adani got TotalEnergies of France as a strategic partner.
Recently, Reliance Industries also demerged its financial arm Jio Financial Services and listed it on bourses on August 21.
Shares of Vedanta Ltd were trading at Rs 235.05, down by 1.05 per cent, at 2.10 PM.
(With agency inputs)
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