Mining giant Vedanta Limited (VEDL), a subsidiary of London-headquartered Vedanta Resources Limited (VRL), has secured approval to raise up to Rs 8,500 crore through various financing avenues, including public offerings and rights issues in multiple tranches. This decision comes at a strategic time as the company seeks to reduce its debt burden and strengthen its financial position.
The fundraising plan was sanctioned during a board meeting on Thursday. The company stated that a committee of directors will determine the precise structure of the fundraising, which may include the issuance of equities and other financial instruments.
In addition to the fundraising approval, Vedanta also announced an interim dividend of Rs 11 per share for FY25, with a record date of May 25. This dividend payout will amount to Rs 4,089 crore, which will aid VRL in repaying part of its debt. The significant dividend announcement follows a substantial Rs 37,573 crore dividend payout by Vedanta in FY23. Over the past two years, the parent company VRL has successfully reduced its debt by $3.7 billion and aims to cut it by an additional $3 billion over the next three years.
Anil Agarwal, who holds a 61.95% stake in VEDL through various entities, leads the company. The remaining shares are distributed among retail shareholders (11.58%) and institutional investors.
In another key development, Vedanta’s board approved an investment in Vedanta Copper International VCI Company to establish a continuous cast copper rod plant in Saudi Arabia. This new facility, projected to have a capacity of 125 kilo tonnes per annum (KTPA), marks Vedanta’s expansion into new geographies and growth opportunities in the copper industry. Following this investment, Vedanta Copper International VCI Company will become a direct wholly-owned subsidiary of Vedanta.
This expansion follows the November 2023 establishment of a new unit in Saudi Arabia by Vedanta’s subsidiary, Malco Energy, with an investment of 100,000 Saudi riyals. Malco Energy spearheaded the creation of Vedanta Copper International VCI Company, emphasizing Vedanta’s strategic focus on the copper sector.
In a related financial maneuver earlier this year, in February, Finsider International Company, a promoter group company of Vedanta, sold 65.52 million shares in the mining major through multiple block deals, valued at Rs 1,737.16 crore. The shares were sold at Rs 265.14 each, reflecting a 5% discount from the previous day’s closing price of Rs 279.20.
Despite these significant developments, Vedanta’s shares closed down 0.96% at Rs 433.20 on the BSE on Thursday. These strategic moves reflect Vedanta’s continued efforts to optimize its financial structure, expand its global footprint, and maintain its leadership in the mining and metals industry.
