Billionaire Agarwal looks to restructure Vedanta to unlock value

Anil Agarwal, founder and owner of Vedanta Resources. (Image: Wikimedia Commons)

Billionaire Anil Agarwal’s Vedanta Ltd. said it intends to streamline its structure and is looking at options including separately listing its aluminum, iron and steel, and oil and gas units.

The latest plan to restructure the Mumbai-listed commodities major comes a year after Agarwal’s efforts to take the company private failed. Greater control of the cash-rich company would help the billionaire pare down debt at his holding group.

The restructuring is aimed at unlocking value for all stakeholders and could include options such as demergers, spin-offs and strategic partnerships, Vedanta said in an exchange-filing Wednesday, adding that the board has formed a committee to evaluate the plan. It didn’t give a timeline for the proposed restructuring. 

The rejig will allow the units to benefit from “tailored capital allocation, and strategic flexibility to drive long-term growth,” Agarwal said. The move will also accelerate the company’s plans to cut emissions, it said.

“Vedanta’s group structure has always been considered as complex and a simplification will certainly be a positive,” according to Prashanth Kumar, an analyst at Dolat Capital Market Pvt. “Currently, many funds may not like to invest in Vedanta because the aluminum business’s carbon footprint is higher. Having separate entities may attract a broader and wider range of investors in their other businesses.”

Shares in the company have more than tripled over the past year as commodity prices rallied and demand for metals boomed globally.

(By Swansy Afonso, with assistance from Debjit Chakraborty)


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