Vedanta Ltd, under the leadership of Anil Agarwal, has assembled a substantial Rs 30,000 crore fund to drive further debt reduction and fuel growth. The war chest has been built through recent fundraising efforts, including a qualified institutional placement (QIP), an offer for sale (OFS), and a dividend payout, according to sources.
The Rs 8,500 crore raised from Vedanta Ltd’s QIP, Rs 3,200 crore from Hindustan Zinc Ltd’s OFS, and Rs 5,100 crore from the second interim dividend, combined with existing cash reserves of Rs 13,000 crore, will accumulate to a total of Rs 30,000 crore once all funds are in place.
This financial reserve is expected to be used for several key initiatives: accelerating the reduction of the company’s debt, enhancing its capital structure, advancing major projects aimed at achieving a near-term target of USD 10 billion in EBITDA, and exploring acquisition opportunities, according to an analyst.
Vedanta continues to post strong financial results, with its profit after tax for the first quarter increasing by 54% year-on-year and more than doubling compared to the previous quarter, reaching Rs 5,095 crore. The company achieved record alumina production at its Lanjigarh plant and record metal output at its Zinc India unit, while also reducing production costs by 20% year-on-year through structural changes and other measures. As of June 30, Vedanta’s debt stood at Rs 6,130 crore.
Additionally, funds generated from the private placement of non-convertible debentures and the sale of promoter stakes (totalling 4.4% between February and June) are expected to further contribute to debt reduction at the group level in the near term. The company’s strategy of combining strategic stake sales, debt reduction, and operational efficiency improvements underscores its commitment to deleveraging and generating free cash flow.
Vedanta is also advancing with its planned demerger, having received a no-objection certificate from secured lenders and stock exchanges. The scheme has been filed with the National Company Law Tribunal (NCLT). The demerger, which will be a straightforward vertical split, is expected to unlock value and attract significant investment into the expansion and growth of each demerged entity.
By simplifying its corporate structure, the demerger will create sector-focused independent businesses, offering new investment opportunities to both Indian and global investors, including sovereign wealth funds and strategic investors.
