Vedanta Ltd. has decided to pause its plan to sell its steel business after raising $1 billion from a share sale, easing its financial situation. The Mumbai-based company, led by Anil Agarwal, was initially looking to sell the business, including its iron-ore and manganese mines, to raise about $2.5 billion to reduce debt.
The recent fundraising has reduced the immediate need to sell, although environmental and regulatory issues have also deterred potential buyers. These concerns, while not specified, often include pollution, human displacement, rights abuses, and wildlife habitat destruction in India.
Vedanta, which entered the steel business in 2018 by acquiring a 90% stake in ESL Steel Ltd., may consider selling the steel operations at a suitable price in the future. ESL Steel operates in Bokaro, Jharkhand, producing items like pig iron, billets, TMT bars, wire rods, and ductile iron pipes.
Last year, Vedanta’s board approved a plan to split the conglomerate into six separate companies, with the demerger expected to be completed by March 2025. Recently, 75% of secured creditors approved this proposal.
Vedanta’s net debt was reported at 613.2 billion rupees ($7.3 billion) as of the end of June, an increase of 8.8% from the previous quarter. For the steel business, saleable production rose 10% year-over-year to 356 kilotons due to improved efficiency, contributing to an overall net profit that exceeded expectations.
Chief Financial Officer Ajay Goel noted that the response to the $1 billion share placement was “overwhelming,” and the proceeds will help reduce the company’s debt and finance costs. Vedanta Limited is one of India’s leading diversified natural resources companies, with a significant presence in sectors like oil and gas, zinc, lead, silver, copper, iron ore, steel, and aluminum.
The company plays a crucial role in contributing to India’s industrial growth and is known for its large-scale operations across the country. Vedanta has been at the forefront of driving sustainable practices within the industry, focusing on reducing its environmental footprint while ensuring the safety and well-being of its workforce.
Headquartered in Mumbai, Vedanta is part of the larger Vedanta Resources Limited group, which has a global presence with interests in several countries. The company’s strategic investments in innovation and technology continue to position it as a key player in the global natural resources market.
