Vedanta’s Mega Demerger Gets SEBI Nod After Compliance Reprimand; NCLT Mumbai to Reopen Hearing on November 12
Introduction
The National Company Law Tribunal (NCLT), Mumbai Bench, recently recorded that the Securities and Exchange Board of India (SEBI) has granted its no-objection to the revised demerger plan of Vedanta Limited, following earlier compliance concerns. The plan proposes to segregate Vedanta’s diversified operations including aluminium, oil and gas, power, and steel into distinct listed entities under a restructuring exercise aimed at unlocking value and improving operational focus.
Factual Background
Vedanta Limited, led by industrialist Anil Agarwal, is a multinational conglomerate engaged in natural resources exploration and production. The company had submitted a demerger plan seeking to separate its major business segments into standalone listed entities. The initiative is part of Vedanta’s broader corporate strategy to streamline operations and improve sector-specific efficiencies. However, SEBI raised objections regarding the company’s disclosures and procedural compliance in the earlier version of the demerger scheme. Specifically, the regulator cautioned Vedanta for implementing modifications without obtaining prior regulatory approval.
Procedural Background
The matter came up before the NCLT Mumbai Bench comprising Judicial Member Nilesh Sharma and Technical Member Charanjeet Singh Gulati. The Tribunal took on record SEBI’s affidavit dated September 2, 2025, confirming that although an administrative warning had been issued on August 13, 2025, the regulator has now granted a non-objection to the revised demerger proposal.
Due to the reconstitution of the bench, the matter was not substantively heard during the latest session. The case is scheduled for a fresh hearing on November 12, 2025, when the Tribunal will also address the objections raised by the Ministry of Petroleum and Natural Gas (MoPNG).
Issues
1. Whether the revised demerger scheme of Vedanta Limited complies with the disclosure and approval requirements prescribed under SEBI regulations.
2. Whether Vedanta has adequately addressed concerns raised by the Ministry of Petroleum and Natural Gas regarding its oil and gas assets, liabilities, and government dues under existing production-sharing contracts.
3. Whether Vedanta’s post-restructuring framework ensures fulfillment of its contractual obligations toward the Government of India and third-party stakeholders.
Contentions of the Parties
SEBI’s Contention: SEBI, in its earlier communication dated August 13, had issued an administrative warning to Vedanta for modifying the scheme without prior regulatory clearance.
However, after considering the company’s revised submissions and improved compliance disclosures, SEBI confirmed via affidavit dated September 2 that it has no further objections to the revised plan.
Ministry of Petroleum and Natural Gas: The Ministry has raised objections concerning Vedanta’s handling of its oil and gas division, asserting that the company failed to provide complete details regarding third-party interests, outstanding liabilities, and government dues under its production-sharing contracts. It also sought clarification on how Vedanta intends to discharge its contractual and statutory obligations following the demerger.
Vedanta Limited’s Contention: Vedanta submitted that the revised demerger plan fully adheres to the regulatory requirements and SEBI’s observations. The company maintains that the restructuring will not adversely affect its contractual commitments or stakeholder interests, and that all statutory dues and obligations will continue to be met by the respective resultant entities post-demerger.
Reasoning & Analysis
The NCLT Bench noted SEBI’s confirmation that it had no objection to the revised demerger scheme, thereby satisfying one of the key regulatory preconditions for proceeding with the restructuring. The Bench, however, refrained from passing any substantive order due to its reconstitution and the pending examination of objections from the Ministry of Petroleum and Natural Gas. The Tribunal emphasized that while corporate restructuring serves a legitimate business objective, it must be accompanied by full transparency and adherence to disclosure norms, particularly in sectors involving natural resource exploration and public interest obligations. The upcoming hearing on November 12, 2025, will thus focus on reconciling regulatory compliance with sectoral governance concerns.
Implications
The NCLT’s eventual decision will have significant implications for both Vedanta Limited and India’s broader corporate restructuring landscape. A clearance of the demerger will pave the way for one of the largest reorganizations in India’s natural resources sector, potentially unlocking investor value and enabling more focused management of individual business verticals. Conversely, stringent scrutiny by the Tribunal and sectoral ministries may reinforce the importance of regulatory transparency, inter-ministerial coordination, and investor protection in high-value corporate reorganizations.