Vedanta (NYSE:VEDL) Ltd., the Indian multinational conglomerate, has drawn interest from JSW Steel and ArcelorMittal (NYSE:MT) for its ESL Steel assets, as it plans a major demerger to boost growth and returns. The company's shares traded at ₹226.90 on Thursday, recording a marginal drop of 0.35%.
The ESL Steel plant, which includes iron ore mines and can produce up to 2.5 million tonnes annually, is part of Vedanta Ltd. and is valued at ₹10,000 crore (INR100 crore = approx. USD12 million). However, the company is open to price negotiation. The plant was acquired from Electrosteel Steels in 2018 due to financial difficulties.
JSW Steel expressed interest in the iron ore mines located in Karnataka and Goa, while ArcelorMittal finds the steel plant in Jharkhand strategically beneficial due to its proximity to key raw materials. The plant is situated near Siyaljori village in Jharkhand's Bokaro district.
Vedanta's demerger plan involves dividing the company into independent verticals including Vedanta Base Metals Ltd., Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, and Vedanta Limited. This move is expected to unlock potential value for the company. As part of the plan, shareholders will receive one share in each new entity for each share they hold in Vedanta Ltd.
Vedanta Base Metals Ltd., which holds international assets including Tuticorin, Fujairah Gold, Silvassa and VZL, contributed 5% to the company's consolidated operating profit in FY 2023.
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