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HomeMarket NewsTrees under a banyan tree find it difficult to grow: Vedanta's Agarwal reaffirms demerger benes
Vedanta Chairman Anil Agarwal says the company’s demerger will unlock tremendous value, creating four independent natural resource-focused entities, each with the potential to become a $100 billion business.
By Sheersh Kapoor March 17, 2025, 7:34:58 PM IST (Published)
Vedanta Chairman Anil Agarwal has reaffirmed the strategic importance of the company’s demerger, stating that it will create four independent natural resource-focused entities, each with the potential to grow into a Vedanta-scale company in its own right.
“I have always found that trees that grow under the shade of a giant banyan tree often find it difficult to grow. But once you take them out and allow them to grow under the sun, they show remarkable growth and progress. Vedanta is like that Banyan tree,” Agarwal said, advocating for the demerger.
The proposed split will create distinct businesses for aluminium, oil & gas, power & steel, and iron, with each entity having its own empowered management, capital structure, and robust assets.
A growing need for more ‘Vedantas’
Agarwal highlighted India’s surging demand for natural resources, stating that the sector’s potential remains underutilised. While mining contributes 15% to Australia’s GDP and 13.5% in Chile, India lags at just 3%, despite double-digit growth in resource consumption.
“Vedanta already accounts for 1.4% of India’s GDP, but we need many more Vedantas to realise the true potential of this sector,” he said. The demerger, he added, would result in significant downstream industrial growth and job creation.
What shareholders stand to gain
Agarwal emphasised that Vedanta shareholders have already seen their investments multiply over 4.7x in five years, with the company delivering an 81% dividend yield, the highest among its peers.
Post-demerger, every Vedanta shareholder will receive one share in each of the newly demerged companies, with no change in overall shareholding structure.
The proposal has received overwhelming support, with 99.5% of shareholders and creditors voting in favour.
"The time to act is now," Agarwal said, envisioning each demerged entity growing into a $100 billion company, strengthening India’s position as a global resource powerhouse.
