Vedanta Plans To Raise Rs 3,000 Crore Via Bond Sale Ahead Of Demerger

Mining giant Vedanta Limited is planning a domestic bond sale next week to raise about Rs 3,000 crore.

The move is in line with the company’s efforts to refinance upcoming debt maturities, according to a report by Economic Times.

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“The bond sale could be launched as early as next week and will target domestic institutional investors,” the report cited a source as saying.

The bond sale will also improve liquidity for the company. While the three-year bonds may carry a coupon of around 8.75 percent, the five-year bonds are expected to offer around 9 percent on maturity, according to the report.

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The company recently secured board approval to issue three-year and five-year non-convertible debentures.

London-based Barclays Inc and New York-based Citigroup Inc will act as arrangers for the transaction.

The fundraising is being planned as the company is looking at multiple ways to manage debt maturities and refinance existing borrowings.

The Mumbai-headquartered company is in the process of demerging its various businesses. It got the go-ahead from the Mumbai bench of the National Company Law Tribunal (NCLT) in December last year for the demerger.

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The NCLT approval was given under Sections 230–232 of the Companies Act. On January 9 this year, the group received the NCLT’s approval for the demerger of the merchant power business.

The demerger exercise will lead to five separate entities working under the Vedanta group.

The group will then consist of the main mining vertical, the aluminium business, the oil and gas business, the power business, and the iron and steel business.

The demerger is expected to be completed by the end of this financial year. All five entities will then be listed on the stock exchanges by the first quarter of the next financial year, that is, June 2027.

Vedanta reported a revenue of Rs 7,215 crore in the December quarter with a net profit of Rs 2,907 crore during the same period.

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