Vedanta’s shares rallied over 2 percent on December 17, touching a fresh 52-week high of ₹580.45, after the Mumbai bench of the National Company Law Tribunal approved the company’s demerger scheme. While the stock pared some gains later in the session, the move capped a sharp one-week rise of nearly 9 percent, reflecting growing investor conviction that the restructuring could materially alter how the market values the group.

The approval, granted on December 16 by the NCLT bench comprising Charanjeet Singh Gulati and Nilesh Sharma, removes a critical regulatory overhang that has lingered for years. In its order, the tribunal said, “The sanction to the company scheme is granted,” clearing the way for Vedanta to proceed with one of the most ambitious corporate restructurings in India’s metals and mining space.

Vedanta had earlier filed a plan to split into five separately listed entities: Vedanta, Vedanta Aluminium Metal, Talwandi Sabo Power, Malco Energy, and Vedanta Iron and Steel. The company has guided that the entire demerger process is targeted for completion by March 31, 2026, subject to remaining regulatory and procedural approvals.

Vedanta’s conglomerate structure has long been a point of debate among investors. While the group owns cash-generating assets across aluminium, zinc, oil and gas, iron ore, and power, the complexity of the structure often diluted the market’s ability to value each business independently. Cyclical swings in commodity prices, combined with concerns around capital allocation and group-level leverage, frequently overshadowed strong performance in individual segments.

The demerger proposal, first announced earlier, was positioned as a way to simplify the structure, ring-fence cash flows, and allow each business vertical to pursue independent growth strategies. However, delays in regulatory approvals meant that markets largely discounted the plan until the NCLT’s formal sanction.

With the NCLT approval now in place, the demerger has moved from intent to execution. Brokerages argue that this materially changes the investment case. ICICI Securities described the development as a clear value-unlocking event, noting that Vedanta’s aluminium and power businesses, in particular, are high-growth segments that could command stronger valuations once separated from the broader conglomerate.

Kotak Institutional Equities also turned more constructive, upgrading Vedanta to ‘Buy’ from ‘Add’ and raising its target price to ₹650 per share. The revised target implies an upside of over 14 percent from the stock’s previous close. According to Kotak, the company is now “on track to conclude the restructuring by the end of financial year 2026,” a timeline the market appears increasingly willing to believe.

The significance of the demerger extends beyond short-term share price gains. In capital-intensive commodity businesses, clarity on cash flows, balance sheets, and capital expenditure priorities is critical. A standalone aluminium company, for instance, can be valued on global aluminium cycles, capacity additions, and power costs, rather than being bundled with unrelated assets.

Kotak highlighted that buoyant commodity prices and multiple growth projects in aluminium and power, scheduled to be commissioned between FY26 and FY27, could drive a meaningful earnings upcycle. The brokerage estimates Vedanta’s EBITDA and EPS to grow at a compound annual growth rate of 17 percent and 24 percent respectively between FY25 and FY28, led by higher volumes and supportive commodity prices.