The Vedanta Group has been making headlines with its impressive financial performance and strategic manoeuvres. Investors who placed their bets on Vedanta and Hindustan Zinc at the end of fiscal 2024 (March 28) saw their investments double in just three months. This remarkable surge in market valuation, amounting to ₹2.2 lakh crore between March 28 and June 20. This has outpaced even the prominent business giants like Adani and Mahindra (₹1.4 lakh crore each), Tata Group (₹60,600 crore), and Reliance Industries (₹20,656.14 crore).
Over the past three years, Vedanta Group has consistently excited investors with generous dividends. In fiscal year 2025, it emerged as the largest wealth creator on D-Street. The significant increase in combined market valuation of its companies, Vedanta and Hindustan Zinc, was driven by a series of positive developments.
Hindustan Zinc’s Strategic MoU: A Boost to Clean Energy
Hindustan Zinc signed a memorandum of understanding (MoU) with US-based AEsir Technologies. A zinc battery maker, propelling its share price up by 6% on the day of the announcement. This MoU is set to secure zinc supply, aiding AEsir Technologies in its battery manufacturing. Thus marks a strategic move for Hindustan Zinc in the global energy transition.
The Zinc Battery Advantage
Zinc batteries, primarily used in large-scale industrial energy storage, offer several benefits. They are environmentally friendly, as zinc is 100% recyclable, and boast superior corrosion resistance, cost-effectiveness, and stability. Zinc batteries are known for their low costs and delivering high power. This comes along with low maintenance and about 20 years of battery life. This aligns perfectly with the Vedanta Group’s ambitions to play a significant role in the clean energy sector.
Rising Demand for Zinc
Zinc, the fourth most used metal globally after iron, aluminum, and copper. It is essential in various sectors, including transportation and infrastructure. Zinc coatings significantly enhance the lifespan of steel used in bridge rails, support beams, railway tracks, and public transportation hubs. India’s infrastructural push and the electric vehicle (EV) boom are expected to drive zinc demand up by 4-5%, compared to a global average growth of 1.5–2%.
Hindustan Zinc’s Expansion Plans
Hindustan Zinc is proactive in securing its future supply chain. It plans to invest in lead alloys and participate in government auctions for critical mineral blocks. The business is also investigating and developing new mineral blocks through its subsidiary, Hindmetal Exploration Services. These strategic initiatives contributed to Hindustan Zinc’s share price skyrocketing by 126% from March 28 to June 21.
Vedanta Demerger and EBITDA Strategy
Adding to its strategic growth, Vedanta is planning a significant demerger of its businesses, announced in September 2023. The plan involves separating its aluminum, oil and gas, steel, zinc and lead, and recycling businesses into distinct listed entities. This move aims to unlock value by allowing each entity to raise capital independently and focus on high-impact growth projects.
Vedanta anticipates significant EBITDA prospects from its diverse divisions after the demerger. $2.7 billion from zinc and silver, $0.9 billion from oil and gas, and $4.2 billion from aluminum. The profit made from business operations before taxes, interest, and depreciation are subtracted is known as EBITDA, and it is a crucial financial metric. It is expected that this approach will improve Vedanta’s capacity to carry out more than fifty expansion projects efficiently.
The Bottom Line
The Vedanta Group’s robust financial performance, strategic investments, and forward-thinking demerger plan are setting it apart as a powerhouse of wealth creation. India’s infrastructure push, EV momentum, and clean energy transition have kept the group busy. Thus driving its market valuation and investor confidence to new heights. As Vedanta continues to deleverage its business and execute strategic initiatives. It also promises to add substantial value for its investors and maintain its leading position in the market.
The coming years will be pivotal for Vedanta as it navigates the dynamic economic landscape and leverages its strategic initiatives. In order to sustain and enhance its growth trajectory. Investors and stakeholders will keenly observe how Vedanta’s strategies unfold. Which will shape the future of one of India’s most dynamic business conglomerates.
