The Business Bytes
New Delhi, August 27, 2024 (TBB Bureau): Vedanta Ltd, led by Anil Agarwal, has amassed a Rs 30,000-crore war chest through recent fundraising activities, including a qualified institutional placement (QIP), an offer for sale (OFS), and a dividend. This fund accumulation includes Rs 8,500 crore from the QIP, Rs 3,200 crore from HZL’s OFS, Rs 5,100 crore from a second interim dividend, and existing cash reserves of Rs 13,000 crore.
The newly formed war chest is expected to drive further deleveraging, bolster capital structure, and advance transformational projects, paving the way for Vedanta’s USD 10 billion EBITDA target. The funds will also support the pursuit of strategic inorganic opportunities.
For the first quarter, Vedanta reported a 54% year-on-year increase in profit after tax, exceeding Rs 5,000 crore and more than doubling from the previous quarter. The company achieved record alumina production at Lanjigarh and increased mined metal output at its Zinc India unit, while reducing overall production costs by 20% year-on-year.
As of June 30, Vedanta’s debt stood at Rs 61,300 crore. The recent private placement of non-convertible debentures and a promoter stake sale between February and June, totaling 4.4%, will further contribute to debt reduction.
The company is focused on strategic stake sales, debt reduction, and optimizing operational efficiencies, with a demerger and a series of transformational projects expected to sustain this progress. The planned demerger, following approvals from secured lenders and stock exchanges, will involve a vertical split to unlock value and attract significant investment into each newly independent business. This restructuring aims to simplify the corporate structure and provide investment opportunities for both Indian and global investors, including sovereign wealth funds and strategic investors.
