Vedanta Ltd's plan of demerger has run into a hurdle once again, with the Ministry of Petroleum and Natural Gas (MoPNG) raising additional objections before the National Company Law Tribunal (NCLT).
The Anil Agarwal-led company is seeking regulatory approval for their proposal to split the company into five separately listed entities, but issues around asset disclosure levels, loan transparency, and potential financial risks are being raised.
At Wednesday’s hearing, the ministry accused Vedanta of misrepresenting its hydrocarbon assets, including blocks under the RJ production-sharing contract, to secure loans without mandatory approvals.
It further alleged that the company failed to provide a full account of about Rs 3,200 crore in loans taken against those assets.
“Whoever intends to merge or demerge must come with clean hands. They must ensure transparency and put forth correct facts before all stakeholders,” the ministry said, urging the tribunal to insist on detailed disclosures rather than approving the scheme in its current form.
Vedanta strongly denied the allegations, with its legal team claiming that all material facts required under the Companies Act, such as audited accounts and auditor reports, had already been disclosed.
The company emphasized that contractual claims did not qualify as material disclosures and that shareholders and creditors had already approved the restructuring.
To ease creditor concerns, Vedanta pointed to its decision to provide a corporate guarantee. It also highlighted that Malco Energy, one of the entities in the demerger scheme, would see its net worth swing from a negative Rs 184 crore to a positive Rs 1,700 crore post-restructuring. The company argued that, with the guarantee, creditors had coverage of more than seven times their claims.
The proceedings also saw confirmation of the withdrawal of objections by Sepco Electric Power Construction Corporation, which had previously claimed Vedanta hid liabilities of Rs 1,251 crore linked to EPC disputes at the Talwandi Sabo power project.
After settling with Vedanta, Sepco consented to the restructuring and agreed not to challenge it further. Despite this resolution, the ministry’s intervention remains a significant obstacle. The matter has now been listed for final hearing on October 8, 2025.
Vedanta is currently trading at Rs 455.20, down 0.20% as of 12:22 PM.
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While Vedanta has pitched the demerger as a way to reduce debt and unlock value by creating focused verticals in aluminium, oil & gas, power, and steel, the government’s objections underline the regulatory and financial uncertainties surrounding the plan. The final ruling by the NCLT in October will be critical in determining whether the restructuring can move forward.