Vedanta demerger likely to be delayed but three factors may support the stock

Shares of Vedanta Ltd., the Anil Agarwal-owned mining conglomerate will be in focus on Thursday, July 3, after the company's demerger process hit a potential roadblock at the Company Law Tribunal (NCLT) on Wednesday.

At the demerger hearing, India's petroleum ministry objected to the demerger, citing its timeline, which was earlier fixed for March 2025 and then pushed to September.

In their respective responses submitted to the NCLT, market regulator Securities and Exchange Board of India (SEBI) said that it is verifying Vedanta's compliance with SEBI norms for the demerger, while the Stock Exchange (NSE) said that it has granted its No Objection Certificate (NOC) to the demerger plan.

The hearing at the NCLT will resume on August 20.

A Vedanta spokesperson said that the conglomerate remains fully committed to its strategic reorganisation plan.

However, there are three factors that could cushion the stock price from any significant downside:

Firstly, although potentially delayed, the demerger will unlock value for shareholders. Vedanta plans on demerging the current listed entity into five different ones and shareholders will be entitled to one share of every demerged entity for every one share they own of Vedanta Ltd.

Shares of Vedanta have risen only 6% so far in 2025. At the current price, the stock is trading at a multiple of five times Enterprise Value to Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA).

Lastly, the US Dollar Index remaining below levels of 97, after having posted their worst first half of a calendar year since 1973 is another positive. A weaker greenback is generally positive for Metal stocks.

Vedanta's promoters currently hold a 56.38% stake in the company, while close to 20 lakh small retail shareholders, or those with authorised share capital of ₹2 lakh, own stake in the company.

Shares of Vedanta ended 0.9% higher on Wednesday at ₹470. The stock is up 8% in the last one month.