Vedanta Limited , a major player in the Indian mining and metals industry, has announced a significant development involving its subsidiary, Talwandi Sabo Power Limited (TSPL). The company has successfully reached a settlement agreement with SEPCO Electric Power Construction Corp, resolving all outstanding claims between the two parties and ending the ongoing arbitration proceedings.

Key Points of the Settlement

• Agreement Reached: TSPL, a subsidiary of Vedanta, has entered into a settlement agreement with SEPCO.
• Resolution of Claims: The settlement resolves all outstanding claims between TSPL and SEPCO.
• Arbitration Withdrawn: As a result of this agreement, the ongoing arbitration proceedings have been withdrawn.

Vedanta's Financial Performance and Stock Update

Despite this positive development, Vedanta Ltd shares closed at ₹454.40, nearly unchanged from a year ago. The company maintains its position as India's highest dividend-yielding private company with a 6.9% yield. Over the past year, the stock delivered 7.4% total returns solely due to dividends, having announced ₹23.00 per share for FY26 after paying ₹43.50 per share last year.

Since FY22, Vedanta has distributed ₹91,200.00 crore in dividends. In FY25, the company reported a net profit of ₹14,988.00 crore, a three-and-a-half-fold increase, on revenues of ₹1.5 lakh crore.

Ongoing Concerns and Recommendations

Despite strong financial performance, concerns persist over delays in Vedanta's proposed demerger into five entities and its acquisition of bankrupt Jaiprakash Associates. Brokerage Nuvama suggests the company should prioritize deleveraging over acquisitions.

Subsidiary Performance

Vedanta's subsidiary, Hindustan Zinc, has seen its shares fall 7.3% over the past year.

Conclusion

The settlement between Vedanta's TSPL and SEPCO demonstrates the company's commitment to resolving disputes and maintaining strong business relationships. By ending the arbitration process, both parties can now focus on their respective business operations without the burden of ongoing legal proceedings.

While this development is positive, Vedanta's stock performance remains subdued despite its high dividend yield. Investors and stakeholders will likely continue to monitor the company's progress on its proposed demerger and acquisition plans, as well as its overall financial strategy in the coming months.

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.