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Vedanta Aluminium Metal Leads Post-Demerger Value Unlock
Vedanta Aluminium Metal emerges as the top post-demerger performer with low costs, manageable debt, and a plan to double capacity to 6 mtpa over three years.
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Vedanta's demerger into four listed entities is starting to show the value unlock the company promised. The five independent companies – Vedanta Aluminium Metal, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron & Steel, and the residual Vedanta Ltd – traded at a combined market cap of Rs 3.53 trillion on their first day, up from Rs 3.02 trillion for the single stock before the split. That is a 16% gain in aggregate value.
Analysts see Vedanta Aluminium Metal as the likely near-term outperformer. The company is India's largest aluminium producer and the third-largest globally outside China. It runs the world's biggest aluminium smelter at Jharsuguda, Odisha, and claims some of the lowest production costs in the industry. The plan to double capacity to 6 million tonnes per annum over three years would make it the world's largest, lowest-cost, integrated aluminium producer, the company said.
The commodities cycle is working in its favour. Aluminium prices have held up on supply constraints from China and steady demand from construction and electric vehicle manufacturing. Vedanta Aluminium Metal carries net debt of 1.3 times Ebitda, a manageable level that leaves room for both capex and dividends.
Vedanta Oil & Gas is the other clean balance sheet story. It has zero debt and is India's largest private sector upstream producer. The group plans to invest $5 billion over three to five years to scale production to 500,000 barrels per day at globally competitive costs, the company said. The portfolio spans tight oil, shale gas, shallow-water and deep-water assets, satellite fields, and onshore acreage in the Northeast. Higher crude prices from geopolitical tensions in the Middle East support the segment.
Vedanta Power carries the highest leverage at 4.7 times net debt to Ebitda. That debt is largely long-term project finance from PFC and REC with 7 to 10 year tenures. The power entity was the fastest-growing earnings contributor in FY26, with Ebitda more than doubling from Rs 650 crore to Rs 1,623 crore. It is India's fifth-largest thermal producer with 4.2 GW of capacity plus long-term PPAs and captive coal resources. The company is also evaluating nuclear energy possibilities.