Synopsis:
Vedanta’s shares took a hit after the NCLT hearing regarding its demerger plan was postponed to September 17, 2025, raising some eyebrows among investors. There were also reports of government pushback, a warning from SEBI, and a Supreme Court decision that went against Vedanta’s TSPL project benefits.
In this article, we will go through the reasons behind this fall and what the news is about, and what Vedanta clarified regarding this matter. With a market capitalisation of Rs 1,74,188 crore, the shares of Vedanta Ltd are currently trading at Rs 445 per share, down by 16 percent from its 52-week high of Rs 526.95 per share. Over the past five years, the stock has delivered a return of 241 percent.
What is the story behind this fall?
Vedanta shares took a hit on Wednesday, following the National Company Law Tribunal (NCLT) deciding to push back the hearing on the company’s demerger plan to September 17, leaving investors feeling uncertain.
Vedanta’s demerger plan, announced in September 2023, aims to split the company into five independent listed entities focused on different businesses. These include Vedanta Aluminium (aluminium and BALCO stake), Vedanta Oil & Gas (Cairn Energy and Cairn India), Vedanta Power (power assets), Vedanta Iron & Steel (iron ore and ESL Steel), and Vedanta Limited.
The central government expressed serious concerns regarding Vedanta’s demerger proposal. They alleged that the company concealed some of its liabilities, failed to disclose crucial information, and presented inflated revenue figures. The government is worried that these issues could hinder its ability to recover outstanding dues from Vedanta.
In addition, SEBI, the stock market regulator, issued a warning to Vedanta. This came after the company made alterations to its demerger plan, even after receiving approval (NOC) from SEBI and the stock exchanges. SEBI labeled this a “serious breach” and requested that Vedanta bring the matter before its board.
In a different matter, the Supreme Court turned down Vedanta’s plea for additional compensation related to its Talwandi Sabo power project. The court upheld a previous ruling stating that the project did not qualify for ‘deemed export’ benefits, adding further pressure on the company.
The Talwandi Sabo Power Limited (TSPL) case was about Vedanta seeking extra compensation and benefits for its power project in Punjab. The company wanted to claim ‘deemed export’ benefits under the Foreign Trade Policy (FTP), which would have reduced its project costs.
However, the authorities had earlier ruled that the project was not eligible for these benefits. On August 20, 2025, the Supreme Court upheld this decision, confirming that Vedanta would not receive any FTP benefits or additional compensation for the TSPL project.
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Clarification Issued by Vedanta
The company clarified that the NCLT hearing on August 20, 2025, took place as scheduled, but due to time limitations, the next hearing is now set for September 17, 2025. Vedanta reassured its investors that this isn’t a setback and that the demerger process is moving forward as planned.
Additionally, the company confirmed that both SEBI and the stock exchanges have already given their approval for the revised demerger plan. Although SEBI issued an administrative warning due to some procedural changes made after the initial approvals, there were no penalties or effects on the demerger timeline.
Vedanta stressed that the issue has been resolved and remains fully dedicated to completing the demerger on time to enhance shareholder value. Vedanta also clarified that the Supreme Court judgment dated August 19 in the TSPL case has no connection to its ongoing demerger process.
The ruling relates to an old contractual dispute over whether customs duty benefits received under the Mega Power Policy should be passed on to Punjab State Power Corporation Limited (PSPCL) under the “change in law” clause of the Power Purchase Agreement. Vedanta added that it is reviewing the judgment and evaluating possible legal options as the next steps.
Written by Satyajeet Mukherjee
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