Each of the four new entities can be $100 billion companies, says Anil Agarwal
The rejig will allow the Anil Agarwal-controlled group to list the businesses — aluminum, oil & gas, power, steel and semiconductors — as separate units, and improve the overall valuation of the group.
In a letter to shareholders, Vedanta’s chairman Anil Agarwal has underscored the focus on being a ‘high-growth business’, with each of the four newly demerged companies having the potential to grow into a $100 billion company.
“I envision that each of the four newly demerged companies has the potential to grow into a $100 billion company. If you look at where we are headed as a global economy and the demand for such products, these companies and their products are the need of the hour,” Anil Agarwal wrote in the letter, sharing through a company filing on March 17.
Agarwal added that the demand for critical minerals and transition metals ‘continues to grow at a double-digit rate’.
The ongoing demerger proposes to create natural resource entities which will further result in creation of downstream industries and more jobs, said Vedanta. The rejig will allow the Anil Agarwal-controlled group to list the businesses — aluminum, oil & gas, power, steel and semiconductors — as separate units, and improve the overall valuation of the group.
“While Vedanta currently contributes close to 1.4% of India’s GDP, there is a need for many more Vedantas to step forward to realize the sector’s true potential,” Anil Agarwal said.
This, along with ‘appropriate’ government support will improved global competitiveness and reduce India’s import bill, Agarwal added.
“The world today is all about pure-play businesses and Vedanta’s demerger will help us achieve that. Each of our demerged entities has the potential to grow into a Vedanta by itself,” said Anil Agarwal.
Last month, Vedanta’s creditors as well as shareholders approved the division of the mining major into five businesses, a step to simplify structure and reduce debt burden. Post demerger, shareholders are slated to receive shares in five new listed entities demerged from Vedanta.
According to news reports, the group’s promoters will maintain over 50 percent stake in each of its demerged entities, after the demerger takes effect.