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Vedanta Gets NCLT Nod For Subsidiary Restructuring

Synopsis:


The National Company Law Tribunal, Mumbai Bench, has sanctioned Vedanta’s Scheme of Arrangement involving Talwandi Sabo Power and other subsidiaries. The approval allows the demerger and transfer of the merchant power business, following regulatory clearances and creditor approvals.


Source:
Vedanta Press Release (NSE Exchange Fillings) | Published on Jan 09, 2025

Disclaimer: This content has been published for informational purposes only. Bajaj Broking is not affiliated with, nor does it endorse or assume any responsibility for, the source material. Readers are advised to consult the original publication for complete and accurate context.

As quoted in the press release of Vedanta (NSE Exchange Filings), the National Company Law Tribunal (NCLT) has sanctioned Vedanta Limited's application for implementing a composite scheme involving several group companies. Upon the completion of statutory/regulatory processes and all necessary approvals from relevant departments, the Approved Scheme may commence as per the Order issued by NCLT Mumbai Bench dated October 25, 2023.

The Composite Scheme was filed with the NCLT on behalf of Talwandi Sabo Power Limited, and includes not only Vedanta Limited, but also its subsidiaries Vedanta Aluminium Metal Limited, Malco Energy Limited and Vedanta Iron and Steel Limited. The approval was issued pursuant to Sections 230 through 232, of the Companies Act 2013.

Also read: Lemon Tree Hotels Reorganises Business, Warburg Pincus Invests

Vedanta Limited

Trade

626.616.75 (2.74 %)

Updated - 12 January 2026
628.70day high
DAY HIGH
614.80day low
DAY LOW
10914136
VOLUME (BSE)

Key Takeaways

  • NCLT Mumbai has sanctioned Vedanta’s Scheme of Arrangement.

  • The scheme involves Talwandi Sabo Power and four other group companies.

  • Merchant Power Undertaking will move to Talwandi Sabo Power.

  • Share entitlement ratio remains unchanged at 1:1.

  • Creditors approved the scheme with near-unanimous consent.

Also read: NTPC Signs Shareholder Agreement with MAHAGENCO for STPL

What the Scheme Covers

The plan approved by the tribunal is the transfer of the Merchant Power Undertaking held by Vedanta Limited into its wholly owned subsidiary, Talwandi Sabo Power Limited. Vedanta Limited will continue to exist as a separate entity; however, Talwandi Sabo Power Limited is now to be the "resulting company" for the power operations carried on by Vedanta Limited.

While the initially approved scheme did include an additional proposal to demerge Vedanta's Base Metal Undertaking, the Board of Directors (or similar governing body) of Vedanta and its applicable subsidiaries have resolved not to proceed with that specific portion of the approved scheme and therefore the scheme approved by the tribunal does not include the demerger of the base metals operation; it only applies to the remaining operations within Vedanta's business.

The tribunal has indicated that each portion of the scheme as they are proposed can be separated from all of the others, and therefore, the tribunal felt that if one section of the scheme doesn't occur, it does not impact the approved status of the remaining sections of the scheme.

Regulatory and Creditor Approval Status

The Tribunal noted that it had met all required procedural elements prior to granting it approval. Stock exchanges had provided "observation" letters indicating their lack of adverse comments regarding the Scheme. There were no objections received from the relevant sector regulators (e.g., power, tax) during the course of the review of the Scheme. 

As directed by the Tribunal, both the meetings of the secured and unsecured creditors of Talwandi Sabo Power were held. The secured creditors unanimously approved the proposed Scheme, and unsecured creditors unanimously approved it with a vote of 99.99%. The meeting of equity shareholders of Talwandi Sabo Power was legally dispensed with.

Impact on Assets, Liabilities and Employees

All liabilities and assets connected to the Merchant Power Undertaking must be transferred to Talwandi Sabo Power Limited under the approved agreement. The company will take over these liabilities as an independent entity.

Furthermore, employees who currently work for the Merchant Power Undertaking will transfer to Talwandi Sabo Power with no interruption of employment; existing terms of employment and benefits will remain intact, allowing workers to continue with uninterrupted employment.

The Tribunal has determined that the dollar amount of assets being transferred to Talwandi Sabo Power will exceed the dollar amount of the liabilities transferred there…this provides reassurance to creditors about the amount they may expect to recover should Talwandi Sabo Power file for bankruptcy.

Shareholding And Accounting Treatment

The shareholding ratio in the transaction is unchanged (1:1) allowing shareholders of Vedanta Ltd., to maintain their corresponding shareholding within the related companies and economies of the group structure. The companies involved must account for this transaction in accordance with relevant accounting standards and Ind AS requirements, with the order stating that statutory dues, stamp duty and tax obligations will apply.

Share Price Update

Vedanta share price stands at ₹609.90 per share on the BSE as of 9 January 2026 at 3:30 PM IST, up by 1.05% on the day.

Published Date : 12 Jan 2026

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