Vedanta's ESL Steel Faces ₹1,255 Crore Demand Notice from Odisha Mines Department

ESL Steel Limited, a subsidiary of Vedanta Limited, faces significant regulatory challenges as it received two demand notices from the Odisha government totaling ₹1,255.38 crores. The notices were issued by the Office of the Deputy Director of Mines, Koira Circle, Government of Odisha, marking a substantial financial demand against the mining operations.

Regulatory Demand Details

The demand notices are based on alleged violations under Rule 12(A) of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016. The specific allegations center around ESL's failure to meet minimum production and dispatch targets during the fourth year of operation.

Parameter:	Details
Total Demand Amount:	₹1,255.38 crores
Issuing Authority:	Office of Deputy Director of Mines, Koira Circle
Regulatory Framework:	Rule 12(A) of Minerals Concession Rules, 2016
Operational Period:	Fourth year of mining lease operation

Mining Lease Operations

The alleged shortfall pertains to ESL's BICO and Feegrade mining leases, which operate under the Mine Development and Production Agreement dated November 15, 2021. These mining operations are subject to specific production and dispatch requirements as mandated by the regulatory framework governing mineral extraction in Odisha.

Company's Response Strategy

ESL Steel has indicated a strong stance against the government demands, stating that the company is currently evaluating both the demand notices and the related computations. The management believes that the claims lack merit and are not sustainable from a legal perspective.

The company has outlined its intention to pursue comprehensive legal remedies, which include:

Seeking a stay on the demand notices
Filing for quashing of the demands through appropriate legal channels
Challenging the computation methodology used by the authorities

Market Performance

Despite the regulatory challenges faced by its subsidiary, Vedanta Limited's shares demonstrated resilience in recent trading session. The stock closed at ₹681.05, registering a gain of ₹5.30 or 0.78% for the day, indicating that investors may be viewing this as a manageable legal challenge rather than a fundamental business concern.

Trading Metric:	Value
Closing Price:	₹681.05
Daily Gain:	₹5.30
Percentage Change:	+0.78%

The regulatory dispute highlights the ongoing challenges faced by mining companies in meeting production targets while navigating complex regulatory requirements in India's mineral-rich states.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.94%	+10.89%	+18.74%	+51.13%	+50.33%	+300.86%

Life Insurance Corporation of India has disclosed a substantial reduction in its shareholding in Vedanta Ltd, filing the mandatory disclosure under SEBI regulations for entities holding more than 5% stake in listed companies. The state-owned insurance giant reduced its position through market sales spanning nearly nine years.

Shareholding Reduction Details

LIC's stake reduction represents a significant divestment from the mining and metals company. The transaction details show a systematic reduction in the insurer's exposure to Vedanta shares.

Parameter:	Before Transaction	After Transaction	Change
Number of Shares:	269,377,846	190,872,447	-78,505,399
Shareholding %:	6.89%	4.88%	-2.008%
Total Voting Capital:	₹391,03,88,057	₹391,03,88,057	No change

Transaction Timeline and Method

The disclosure reveals that LIC conducted the share sale through market transactions over an extended period from April 26, 2017 to January 14, 2026. The insurance corporation filed the regulatory disclosure on January 16, 2026, as required under Regulation 29(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Regulatory Compliance

LIC submitted the disclosure to both major stock exchanges where Vedanta shares are listed - NSE and BSE. The filing confirms that LIC does not belong to the promoter or promoter group of Vedanta Ltd. Key compliance details include:

Transaction Mode: Market sale
Regulatory Framework: SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
LIC PAN: AAACL0582H
Filing Date: January 16, 2026

Market Impact

The share sale of 78.5 million shares represents a significant volume transaction in Vedanta's equity. Despite the substantial divestment by LIC, Vedanta's total equity share capital remained unchanged at ₹391,03,88,057, indicating the transactions occurred in the secondary market without affecting the company's capital structure.

LIC's reduced holding of 4.88% still represents a substantial institutional investment in the mining company, maintaining the insurer's position as a significant stakeholder while complying with its portfolio management requirements.