Vedanta Demerger Eligibility: Buying Window Nears Ahead of Record Date

Vedanta Announces Demerger, Creation of Four Separate Entities

Vedanta's board has approved the demerger of its business, resulting in the creation of four separate entities. The Anil Agarwal-led mining major has announced the demerger record date as 1 May. The demerger will result in the separation of Vedanta's businesses into aluminium, merchant power, oil and gas, and iron ore verticals into separate listed entities.

As part of the spin-off, each shareholder will be allotted shares in the ratio of 1:1 for each demerged entity. This means that if you hold one Vedanta share as on the record date, you will end up with five shares on the ex-date. The ex-date for Vedanta's demerger is April 30, and the stock will start trading without the demerged entities from this date onwards.

However, investors must note that the demerger record date falls on a stock market holiday, Maharashtra Day, on 1 May. This changes the last day by which one must buy the shares of metal stock. Both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) will be shut for trading on 1 May. As a result, the last day to purchase shares for the demerger benefit is 29 April.

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Nuvama Research advises investors to take positions by 28 April for safer execution. This will ensure that investors can participate in the demerger trade without any issues.

Vedanta Demerger Details

As part of the demerger, Vedanta plans to separately list four entities: Vedanta Aluminium Metal Limited (VAML), Talwandi Sabo Power Ltd (TSPL), Malco Energy Ltd (MEL), and Vedanta Iron and Steel Limited (VISL). The demerger will involve the transfer of non-convertible debentures (NCDs) forming part of the aluminium undertaking to Vedanta Aluminium Metal. Additionally, Vedanta's shareholding in Bharat Aluminium Company Ltd (BALCO) will be transferred to Vedanta Aluminium Metal Ltd.

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Following the implementation of the scheme, the names of Talwandi Sabo Power and Malco Energy will change to Vedanta Power and Vedanta Oil and Gas, respectively. The demerger will result in the creation of four separate listed entities, each representing a distinct business vertical of Vedanta.