The National Company Law Tribunal (NCLT) has concluded hearings and reserved its judgment on Vedanta Ltd 's proposed demerger, following objections raised by the government over pending claims worth ₹16,700 crore. This development has brought the spotlight on the mining giant's corporate restructuring plans and the potential implications for its financial standing.

Government's Concerns

The government's objection to Vedanta's demerger proposal stems from several key points:

1. Asset Base Reduction: Post-demerger, Vedanta's asset base for the oil and gas entity would decrease from over ₹2 lakh crore to ₹29,150 crore.
2. Reduced Asset Coverage: This substantial reduction in assets could potentially risk the government's ability to recover its claims.
3. Undisclosed Liabilities: Authorities have flagged undisclosed liabilities in ongoing litigation, particularly noting arbitral proceedings for Rajasthan oil blocks.

Financial Implications

The government's claims and potential payouts present a significant financial consideration:

Vedanta's Response

In response to these concerns, Vedanta has presented the following arguments:

1. Bank Clearances: The company submitted No Objection Certificates from eight banks.
2. Asset Coverage: Vedanta asserts that government claims would remain protected by assets 1.8 times the claimed amount.
3. Liability Disclosure: The company maintains that it's not required to disclose liabilities until final orders confirm claims.

Market Reaction

The market's response to these developments was relatively muted, with Vedanta's shares closing at ₹520.45, down 0.63%.

Upcoming Investor Meetings

In a separate development, Vedanta has announced a series of upcoming analyst and institutional investor meetings:

These meetings may provide further insights into the company's plans and strategies moving forward.

As the NCLT deliberates on this case, the outcome will be closely watched by investors, industry observers, and government authorities alike. The decision could have implications for Vedanta's corporate structure and financial obligations.

Vedanta Limited has received a boost from multiple brokerages following its second-quarter results, which met street expectations with strong operational performance. The company's robust financial performance and positive outlook have led to maintained bullish stances from several prominent analysts.

Key Financial Highlights

Vedanta reported impressive financial results for the second quarter:

Analyst Perspectives

Several brokerages have expressed optimism about Vedanta's performance and future prospects:

• Nuvama: Projects a 20% quarter-on-quarter EBITDA jump and raised FY27 estimated EBITDA by 4% to ₹63,450.00 crore.
• Citi: Expects aluminium to average $3,500.00 in 2027 and raised FY26/FY27/28 EBITDA estimates by 6%, 15%, and 16% respectively.
• ICICI Securities: Highlighted Vedanta as a prime beneficiary of the commodity cycle, with the aluminium division expected to drive majority earnings.

Factors Driving Optimism

1. Vedanta Resources' comfortable leverage levels
2. Potential medium-term aluminium price upside on London Metal Exchange
3. Volume growth prospects
4. Expected demerger completion

Aluminium Sector Focus

The aluminium sector is emerging as a key driver for Vedanta's growth:

• Citi's projection of $3,500.00 average aluminium price in 2027 indicates strong sector outlook.
• ICICI Securities emphasizes the aluminium division's role in driving majority of earnings.

Corporate Governance and Transparency

As per the latest LODR (Listing Obligations and Disclosure Requirements) data, Vedanta continues to maintain transparency with its stakeholders. The company recently published its unaudited financial results for Q2 and H1 FY26 in major newspapers, demonstrating its commitment to keeping investors informed.

Conclusion

Vedanta's strong Q2 performance, coupled with positive analyst outlooks and strategic focus on high-potential sectors like aluminium, positions the company favorably in the commodities market. As global demand for metals continues to grow, Vedanta appears well-placed to capitalize on these opportunities, potentially leading to enhanced shareholder value in the coming years.