The Business Bytes
THEBUSINESSBYTES BUREAU
BHUBANESWAR, MARCH 26, 2025
Vedanta Ltd. Chairman Anil Agarwal has expressed his confidence that each of the company’s demerged entities has the potential to grow into a $100 billion company. In a letter to shareholders, Agarwal reiterated Vedanta’s commitment to unlocking value, driving India’s natural resources sector, and ensuring long-term growth for stakeholders.
Vedanta’s proposed demerger aims to establish four independent, resource-focused entities, each with distinct management structures, capital frameworks, and strategic priorities. Agarwal underscored the importance of pure-play businesses in maximizing growth and efficiency. He stated that the restructuring would enable stakeholders to directly benefit from Vedanta’s unique assets, sector-leading position, and disciplined financial approach.
“I envision that each of the 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,” Agarwal said.
He further highlighted the continuing strength of the listed Vedanta Limited, which will retain ownership of significant assets, including a 63.4% stake in Hindustan Zinc—one of the world’s leading producers of zinc and silver—as well as Zinc International, which holds vast mineral resources in Africa. “Additionally, Vedanta Limited will house our growing technology businesses and continue to act as an incubator for the group,” he added.
Comparing Vedanta’s transformation to a banyan tree fostering new growth, Agarwal explained, “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. 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. The time to act is now.”
The company’s demerger plan has received overwhelming support, with 99.5% of shareholders and creditors voting in favor of the move. Agarwal emphasized that Vedanta remains committed to executing this vision, citing the company’s strong financial track record. “Any investor investing in Vedanta at the start of the past five-year period would have seen investments multiplying over 4.7 times to date, both through capital appreciation and cash dividends returned. Vedanta delivered a dividend yield of 81% during this period, the highest amongst all its peers,” he said.
Agarwal also spoke about the crucial role of natural resources in economic development, drawing comparisons with global markets. “Most of the world’s major economies—the United States, Canada, Europe, the Middle East, Russia, China, South Africa, and Australia—have successfully ‘farmed’ the wealth that nature has blessed them with ‘below the ground’. In Guyana, for instance, per capita income went from around $6,000 in 2019 to $18,000 in 2022 after the first oil was produced, and it is today the fastest-growing economy in the world with a growth rate of over 40% per annum,” he said.
In India, despite the natural resources sector contributing close to 3% of GDP, demand continues to rise at a double-digit rate. “Less than 20% of the country’s natural resources potential has been explored. The opportunities to grow are therefore immense,” Agarwal added.
He also highlighted the surging demand for critical minerals and transition metals, which is being driven by India’s rapid economic growth and the global transition to a low-carbon future. “Aluminium is growing at 12%, Copper at 15%, and Zinc at an average of 10%. This demand is only expected to increase as India and the global economy move towards embracing a low-carbon future and work toward ensuring the stability of their critical mineral and transition metal supply chains,” he said.
With the backing of its stakeholders and a strategic focus on growth, Vedanta’s demerger is poised to reshape India’s natural resources landscape, creating multiple industry-leading entities capable of unlocking significant value.
