NCLT Mumbai Approves Demerger Of Vedanta's Merchant Power Business Into Talwandi Sabo Power

The Mumbai bench of the National Company Law Tribunal (NCLT) on Friday approved a restructuring move within the Vedanta group, clearing the demerger of the merchant power business of Vedanta Ltd and its transfer to Talwandi Sabo Power Ltd.

The order was passed on a second-motion petition filed by Talwandi Sabo Power Ltd.

The coram, comprising Judicial Member Mohan Prasad Tiwari and Technical Member Charanjeet Singh Gulati, noted that all statutory requirements had been met and that the company had placed on record approvals from both secured and unsecured creditors.

“From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition bearing No. C.P.(CAA)/254/MB/2025 is approved,” the tribunal said.

The approval comes soon after another major clearance for Vedanta. In December 2025, the same tribunal had sanctioned Vedanta's broader composite demerger plan involving four group companies: Vedanta Aluminium Metal Ltd, Talwandi Sabo Power Ltd, Malco Energy Ltd and Vedanta Iron and Steel Ltd, along with their respective shareholders and creditors.

Under the present scheme, Vedanta's Merchant Power Undertaking will be demerged and transferred to Talwandi Sabo Power Ltd. as a going concern. Once the scheme becomes effective, all assets, liabilities, contracts, rights, and employees linked to the merchant power business will move to TSPL. Employees will continue in service without any break and on terms that are not less favorable than those in place before the demerger.

The companies told the tribunal that the restructuring is aimed at giving sharper managerial focus to each business, improving operational efficiency, and unlocking value by separating Vedanta's diverse operations into independent entities with distinct risk and growth profiles.

At the first-motion stage, the tribunal had dispensed with the meeting of TSPL's equity shareholders but directed the company to convene meetings of its secured and unsecured creditors.

During the second round of hearings, the company informed the tribunal that it had sent notices to all the relevant authorities, including the Regional Director, the Registrar of Companies, the income tax and GST departments, and the ministries of power and coal. The Regional Director flagged a few routine points on accounting treatment, employee protection, and regulatory compliance, which the company responded to through affidavits and undertakings placed on record.

The official liquidator and the tax department did not file any objections to the scheme.

While sanctioning the arrangement, the tribunal directed Talwandi Sabo Power Ltd. to file a certified copy of the order and the approved scheme with the Registrar of Companies within 30 days. It also clarified that the approval does not grant any exemption from taxes, stamp duty, or other statutory compliances.

Case Title: Vedanta Ltd, Vedanta Aluminum Metal Ltd, Talwandi Sabo Power Ltd, Malco Energy Ltd, Vedanta Base Metals Ltd, Vedanta Iron and Steel Ltd

Citation: 2026 LLBiz NCLT (BOM) 34

Case Number: C.P.(CAA)/254/(MB)2025, C.A.(CAA)/220(MB)2024

For Petitioners: Senior Advocate Ravi Kadan with Advocates Hemant Sethi, Rohan Batra, Rishabh Bhargava, Dhruv Sethi, Yuga Kane, Tanaya Sethi instructed by Hemant Sethi & Co., Anagaram Partners