VEDANTA is preparing to spin off businesses into several listed entities in a broad restructuring that, if successful, could help tycoon Anil Agarwal manage his metals-to-energy empire’s debt load, people familiar with the matter said.

The company has informed its lenders of the intended restructuring and could announce the plans in the coming days, according to the sources. Businesses including aluminium, oil and gas, iron ore and steel will be separately listed, they said, asking not to be identified as the information is confidential.

Vedanta’s parent, Vedanta Resources, will remain the holding company, the sources said. Deliberations are ongoing and no final decisions on the structure or timing of the de-merger have been made.

Resolving a byzantine corporate construct has been a priority for years for Agarwal’s indebted Vedanta Resources, but a global increase in borrowing costs has raised the stakes, with about US$2 billion of bonds due to be redeemed next year. In August, Agarwal floated a plan to separate out some of its businesses but provided no details.

Among the potential hurdles ahead is the group’s use of its own stock in Vedanta and in key cash-generating unit Hindustan Zinc to secure debt. According to stock exchange data, it has pledged virtually all of its majority holding in both companies.

“Vedanta has limited ability to de-merge other units given creditors have charge of cash-generating assets, particularly Hindustan Zinc,” said Deven Choksey, managing director of brokerage KRChoksey Shares & Securities in Mumbai, adding Vedanta would nevertheless be right to tap heightened global equity investor interest in India.

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Vedanta’s debt remains under pressure. The group’s August 2024 and March 2025 bonds are trading below 75 US cents on the US dollar, levels typically considered distressed. Moody’s Investors Service this week pushed the parent’s ratings deeper into junk, citing the elevated risk of debt restructuring over the next few months.

Shares in Vedanta on Thursday (Sep 28) gained as much as 2 per cent in Mumbai trading, the most since Sep 14. The stock has fallen about a fifth over the past 12 months. Meanwhile, Hindustan Zinc shares fell about 0.6 per cent.

A streamlined structure could also help Agarwal hive off unprofitable or low-growth assets – something the billionaire has long avoided – while allowing investors to bet on some of the company’s newer ambitions, including in semiconductors and display glass.

Representatives for Vedanta and Vedanta Resources did not respond to requests for comment. BLOOMBERG