Vedanta Iron & Steel Limited's subsidiary, ESL Steel Limited, has received five Show Cause Notices (SCNs) from the Registrar of Companies (RoC), Ranchi, under the Ministry of Corporate Affairs, in relation to alleged non-compliances under various provisions of the Companies Act, 2013. The disclosure was made pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, and was filed on July 30, 2026.

Details of Show Cause Notices

The five SCNs cover a range of alleged regulatory lapses across multiple financial years. The notices were issued between July 21, 2026, and July 29, 2026. The following table summarises the key details of each notice:

Nature of Alleged Non-Compliances

The alleged violations span several areas of corporate governance and regulatory disclosure requirements under the Companies Act, 2013:

• SCN 1 (Section 203(5)): Board resolutions approving the appointment of the CFO and Company Secretary allegedly did not contain remuneration details in monetary terms, pertaining to FY 2020-21.
• SCN 2 (Section 178(8)): Alleged non-compliance relating to the composition of the Nomination and Remuneration Committee, pertaining to FY 2020-21.
• SCN 3 (Section 196 read with Schedule V): Alleged failure to annex the prescribed Schedule V statement to the AGM Notice for approval of remuneration of the Whole-time Director, pertaining to FY 2019-20.
• SCN 4 & SCN 5 (Section 197(15) read with Rule 5): Alleged non-disclosure of the ratio of directors' remuneration to median employee remuneration and other prescribed disclosures in the Board's Report/Corporate Governance Report, pertaining to FY 2015-16 to FY 2017-18.

Company Response and Impact Assessment

ESL Steel Limited has stated that it is examining the matters raised in the Show Cause Notices and will submit appropriate responses before the adjudicating authority within the prescribed timelines. Vedanta Iron & Steel has clarified that the notices shall not have any significant financial and operational impact on the company. The disclosure was signed by Tina Lakhani, Company Secretary & Compliance Officer (Membership No.: A 34723), on July 30, 2026.

Vedanta Iron & Steel reported a consolidated net profit of ₹122 crore for the first quarter ended June 30, 2026 (Q1FY27), marking a significant turnaround from a net loss of ₹142 crore in the corresponding quarter of FY26. The company’s revenue from operations grew by 18% year-on-year to ₹3,680 crore, driven by increased production volumes and improved pricing in its core steel and iron ore businesses. This result follows the recent demerger of Vedanta Limited’s iron ore undertaking into the company, which became effective on May 1, 2026. The Board of Directors approved the unaudited financial results at a meeting held on July 29, 2026.

The statutory auditors, M/s S.R. Batliboi & Co. LLP, issued an unmodified limited review report on the consolidated and standalone financial statements in compliance with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The results were prepared in accordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013.

Financial Performance Highlights

The company’s total income stood at ₹3,751 crore, compared to ₹3,340 crore in Q1FY26. While total expenses increased to ₹3,586 crore from ₹3,428 crore in the prior year period, the reduction in finance costs helped improve the bottom line. Finance costs dropped significantly to ₹207 crore in Q1FY27 from ₹461 crore in Q1FY26, contributing to a pre-tax profit of ₹178 crore versus a loss of ₹57 crore in the comparable period. The effective tax rate (ETR) for Q1FY27 was approximately 31.5%.

Segment-wise, the steel business contributed significantly to segment revenue, while the iron ore segment generated substantial value following the demerger integration. On a standalone basis, Vedanta Iron and Steel reported a net profit of ₹185 crore for Q1FY27, compared to a profit of ₹225 crore in Q1FY26. Standalone revenue from operations was ₹1,512 crore, up 15.8% YoY.

Operational Updates and Capex Plans

Steel saleable production reached 582 KT, up 4% YoY, while sales volumes grew by 9% YoY. Steel margins expanded by 60% YoY, with margin per tonne increasing by 388 basis points. Iron ore production stood at 2.6 million dry metric tons (DMT), up 4% YoY, with merchant sales rising 2% YoY. The company maintains an AA/Stable credit rating from CRISIL. Net debt to EBITDA ratio stands at 1.3x, excluding inter-company loans of ₹960 crore. Cash and cash equivalents, including restricted fixed deposits of ₹352 crore, totaled ₹1,018 crore.

The investor presentation highlighted significant capital expenditure plans. Approved capex includes ₹722 crore for Ductile Iron Pipe – Goa and ₹2,975 crore for ESL Phase 1A. Capex incurred in Q1FY27 was ₹17 crore for DIP Goa and ₹64 crore for ESL Phase 1A. Future projects include expanding Bicholim Mine (Goa) from 3 to 3.6 MTPA and developing a 0.5 MTPA Cudnem Mine (Goa) in FY27. For FY28, plans include a Janthakal Mine (Karnataka), a 0.5 MTPA Coke Oven at ESL Bokaro, hot metal capacity expansion from 1.7 to 3.2 MTPA, and a 0.42 MTPA DI Pipe Plant at VAB Goa.

What the Numbers Show

The most notable aspect of Q1FY27 results is the dramatic improvement in profitability despite a modest increase in total expenses. The surge in net profit is primarily attributable to a substantial decrease in finance costs, which fell by over 55% year-on-year due to the settlement of inter-company payables as per group demerger adjustments. Additionally, interest income reduced by 67% YoY due to the elimination of inter-division receivables under the Vedanta-approved demerger scheme. The absence of exceptional items in the current quarter, unlike the prior year which saw exceptional losses due to asset impairments and regulatory provisions, further aided the turnaround. The company also recorded a small profit of ₹10 crore from discontinued operations (Port Business at Visakhapatnam), compared to ₹22 crore in Q1FY26.