Vedanta to demerge real estate assets from parent company

Executives at Vedanta, the natural resources company, have announced that the company will demerge its surplus real estate assets accumulated at locations across India into another entity, Vedanta Property Platforms. They expect the proposed demerger to enable the company to unlock value out of surplus assets.

The surplus real estate portfolio to be demerged comprises of about 2,200 acres of industrial land and about 55,000 sq feet of residential/ commercial properties including land parcels, buildings and flats in Maharashtra, Goa, Gujarat, Tamil Nadu and Karnataka.

The demerger is being called a vertical split, wherein for every 20 shares of Vedanta the shareholders of Vedanta will receive one share of Vedanta Property Platforms.

Over the years, through various acquisitions, Vedanta and some of its group companies have accumulated a real estate portfolio across multiple geographies.

“The contribution and consolidation of real estate business from across the Vedanta group companies would significantly enhance the ability of the resulting company to carry on the real estate business in a more effective and efficient manner,” they have said in a note to investors.

This platform will facilitate leasing operations, township development, industrial development and infrastructure support service (including areas like education, sports and animal welfare infrastructure), and enhance coordination, efficiency, and scalability across intra-group projects.

The proposed restructuring is said to be consistent with broader industry trends (Bharat Earth Movers, Raymond, Emami, ITC and Bombay Dyeing) in which other companies have undertaken similar restructuring efforts in past.