December 1, 2021

The World Live Breaking News Coverage & Updates IN ENGLISH

The World Live Breaking News Coverage & Updates IN ENGLISH

Anil Agarwal to split metals, oil business from Vedanta

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Anil Agarwal to split metals, oil business from Vedanta
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Anil Agarwal to split metals, oil business from Vedanta

MUMBAI: Metals tycoon Anil Agarwal plans to separate the aluminium, oil & gas and iron & steel businesses from Vedanta to form three separate entities as he reviews the flagship’s corporate structure. The Rs 86,863-crore Vedanta has a play in more than half a dozen segments including zinc, lead & silver, copper, and power. The biggest revenue contributor to Vedanta in fiscal 2021 was aluminium followed by zinc, lead & silver, and copper.
Agarwal has appointed a group of Vedanta directors and external advisers to evaluate the spin-off proposal in order to unlock value within the commodity behemoth’s corporate structure. This, according to Agarwal, will create three independent companies, each benefiting from greater focus, tailored capital allocation based on business-specific dynamics, and strategic flexibility to drive long-term growth and value for all stakeholders.

Anil Agarwal to split metals, oil business from Vedanta

Agarwal’s latest plan comes a year after his move to delist Vedanta failed. A tighter grip over the cashrich Indian commodity giant will help Agarwal reduce liabilities at his holding company. The metals tycoon didn’t specify a timeline for the proposed demerger. The move, said Vedanta, will also accelerate its plans to cut carbon emissions.
“Many funds may not like to invest in Vedanta because the aluminium business’s carbon footprint is higher. Having separate entities may attract a broader and wider range of investors in their other businesses,” Dolat Capital Market analyst Prashanth Kumar told Bloomberg News. Vedanta has targeted to achieve net zero carbon emissions by 2050 and has pledged $5 billion over the next 10 years to accelerate this transition.
The company’s shares more than trebled over the past year, from Rs 108 to Rs 338 now, as commodity prices rallied and demand for alloys boomed globally. Its market capitalisation on the BSE grew to nearly Rs 1.3 lakh crore from Rs 39,904 crore in a year. On Wednesday, the Vedanta stock closed 1.8% higher by end of trade on the BSE.

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