The Andhra Pradesh government has issued a conditional No Objection Certificate (NOC) to Vedanta Ltd.'s Cairn Oil & Gas Division for drilling onshore oil and gas wells in Krishna district. The approval marks a significant step forward for the company's exploration activities under the government's energy development initiatives.

Project Details and Scope

According to the recent Government Order, Vedanta's Cairn Oil & Gas Division was awarded development work for the Onshore Oil and Gas Field under the Discovered Small Field (DSF) Policy, 2018. The company had initially submitted a representation requesting NOC for drilling wells at 35 locations across various village limits within the block.

Government Conditions and Restrictions

The NOC comes with specific terms and conditions that Vedanta must adhere to during operations. The government emphasized that the certificate is issued purely from an irrigation perspective and is temporary in nature.

Key restrictions include:

• No water extraction from irrigation canal sources including Bandar Canal
• Prohibition on using KDS canal network, drainage network, ponds, or reservoirs
• Complete ban on drawing water from any surface-water sources
• Mandatory requirement to obtain all necessary permissions from concerned departments before commencing operations

Implementation and Oversight

The government order directs multiple authorities to oversee the implementation process. The Engineer-in-Chief (Irrigation) of the Water Resources Department in Vijayawada, the Chief Engineer of Krishna Delta System in Vijayawada, and the Collector of Krishna District have been tasked with taking necessary action accordingly.

Company Background

Cairn Oil & Gas, operating as a division of Vedanta, holds the position of India's largest private oil and gas exploration production company. The company currently contributes approximately 25.00% of the country's domestic crude production and has set an ambitious vision to increase this contribution to 50.00% through sustainable and responsible practices.

Vedanta Limited's shares continue their impressive rally, maintaining strong upward momentum following the National Company Law Tribunal's approval of the company's long-awaited demerger proposal. The stock has delivered exceptional performance, gaining for 13 straight trading sessions and reaching new heights in the process.

Stock Performance and Market Response

The company's shares have demonstrated remarkable strength, with the following key performance metrics:

The sustained momentum reflects strong investor confidence following the regulatory approval, with the stock reaching new 52-week highs during this period.

NCLT Demerger Approval Details

The National Company Law Tribunal's approval represents a significant milestone for Vedanta's restructuring plans. This approval concludes a comprehensive two-year process that encountered various challenges:

• Regulatory hurdles and compliance requirements
• Objections from the petroleum ministry
• Multiple deadline extensions
• Complex restructuring negotiations

The demerger plan, spearheaded by billionaire Anil Agarwal, aims to transform the metals-to-energy conglomerate into a more focused, multi-entity structure.

Demerger Structure and Shareholder Benefits

Under the approved scheme, Vedanta will split into five independently listed entities:

Shareholders will receive one share in each of the four new companies for every Vedanta share held, while the parent entity will continue to retain its stake in Hindustan Zinc. This structure is expected to unlock value across the company's diverse businesses and improve operational focus.

Analyst Coverage and Future Outlook

Market analysts maintain a positive outlook on the stock, with coverage showing strong support:

The demerger is anticipated to attract sector-specific investors as the group transitions into its new multi-entity structure, potentially enhancing value creation across different business segments.

Strategic Initiatives and Expansion Plans

Vedanta Group Chairman Anil Agarwal has outlined several strategic initiatives alongside the demerger:

Green Aluminium Facility:

• Planned capacity of 3 million tonnes
• Driven by rising domestic demand
• Supported by government infrastructure push

Oil and Gas Expansion:

• Deployment of 25 rigs planned
• Initial production target of up to 500,000 barrels per day
• Benefits from recent regulatory reforms in exploration

These initiatives demonstrate the company's commitment to expanding operations across key sectors while leveraging favorable market conditions and regulatory environment. The combination of the approved demerger structure and these strategic expansions positions Vedanta for enhanced operational efficiency and value creation across its diverse business portfolio.