Vedanta Limited announced a significant development for its wholly-owned subsidiary, Talwandi Sabo Power Limited (TSPL), marking a resolution to long-standing disputes in the power sector.

Settlement Agreement Details

TSPL entered into a Settlement Agreement with SEPCO Electric Power Construction Corporation, effectively resolving all long-standing disputes related to EPC (Engineering, Procurement, and Construction) contracts for a 3x660 MW Thermal Power Project. The agreement provides for a comprehensive resolution of all claims and counter-claims between the parties, ending pending arbitration proceedings.

Key Points of the Agreement

• Full Resolution: The settlement offers a full and final resolution to all disputes between TSPL and SEPCO.
• Arbitration Withdrawal: As part of the agreement, all pending arbitration proceedings will be withdrawn.
• Operational Strengthening: This resolution is expected to strengthen TSPL's operational position in the power sector.

Quarterly Financial Results

Vedanta also reported its quarterly financial results:

Operational Highlights

• Lanjigarh refinery achieved record alumina production of 587 kt, up 9%
• Business segments performed above analyst estimates:
  • Aluminium EBITDA: ₹4,462.00 crore
  • Oil and gas EBITDA: ₹1,268.00 crore
  • Zinc International EBITDA: ₹422.00 crore

Market Performance

Vedanta's shares closed up 3.05% at ₹450.95.

Implications for Vedanta

The closure of these legacy disputes represents a positive step for Vedanta Limited, potentially reducing legal uncertainties and allowing TSPL to focus on its core operations. This development aligns with Vedanta's strategy to streamline its subsidiaries' operations and resolve outstanding issues.

Corporate Disclosure

In compliance with regulatory requirements, Vedanta Limited promptly informed the stock exchanges about this material development. Prerna Halwasiya, Company Secretary and Compliance Officer of Vedanta Limited, signed the official communication to the BSE Limited and National Stock Exchange of India Limited.

Recent Credit Rating Action

In a separate development, CRISIL Ratings Limited reaffirmed Vedanta Limited's credit ratings:

The ratings agency has enhanced the rated amount for Bank Debt while maintaining the long-term rating on 'Watch Developing' status.

This settlement agreement, coupled with the stable credit rating and mixed quarterly results, may influence market perception of Vedanta Limited and its subsidiaries in the coming days.

Vedanta , a leading diversified natural resources company in India, has announced a significant increase in capital spending exceeding 125.00 billion rupees to bolster metal production for the electric vehicle (EV) industry. This investment aims to enhance the company's capabilities in producing metals crucial for the growing EV sector.

Meanwhile, in a separate development, a Supreme Court judge has recused himself from hearing a Public Interest Litigation (PIL) case against Vedanta, Hindustan Zinc Limited (HZL), and Vedanta Resources. The case, which is based on the Viceroy Report, will now be heard by a different bench.

Details of the PIL

The PIL alleges serious financial misconduct by the companies, including:

• Financial manipulation
• Price rigging
• Regulatory violations
• Diversion of funds through large dividends and artificial brand fees
• Share price manipulation
• Undisclosed related-party transactions

The petition also claims that Vedanta Resources secured loans from Vedanta to acquire more shares without proper disclosure of pending litigations and statutory dues related to HZL.

Regulatory Probes Sought

The PIL seeks regulatory investigations by several agencies:

• Securities and Exchange Board of India (SEBI)
• Reserve Bank of India (RBI)
• Ministry of Corporate Affairs

The petitioner questions the inaction of these agencies despite representations from Viceroy, describing the case as involving large-scale financial misconduct that affects investors and public trust.

Implications and Looking Ahead

While Vedanta's substantial investment in EV metal production signifies a strategic move to capitalize on the growing electric vehicle market, the ongoing legal challenges could potentially impact the company and its associated entities. The reassignment of the PIL case to another bench may lead to a delay in the hearing.

As the situation unfolds, stakeholders, including investors, regulatory bodies, and the general public, will be keenly watching for any further developments in both the investment plans and the legal matter. The case adds another chapter to Vedanta's complex legal history and highlights the ongoing scrutiny of corporate governance in India's natural resources sector.

It's important to note that the recusal of a judge is a standard legal procedure designed to maintain the neutrality of the judicial system. As more information becomes available, a clearer picture of the case and its potential impact on Vedanta and related companies may emerge.