Vedanta Group is drawing up a Rs 30,000 crore plan to reduce its debt and boost growth.
Anil Aggarwal-led Vedanta Limited has prepared a special plan of around Rs 30,000 crore through qualified institutional placement (QIP), offer for sale (OFS) and dividends to reduce debt and boost growth. In fact, this money will be in the form of a fund of sorts. Sources said that Rs 30,000 crore will be raised after the company raises money from existing cash reserves of Rs 13,000 crore along with the proceeds from Vedanta Ltd’s QIP of Rs 8,500 crore, HZL’s OFS of Rs 3,200 crore and second interim dividend of Rs 5,100 crore. The fund will be ready.
Where will the funds be used?
An analyst said Vedanta can use the funds to quickly shore up its balance sheet, improve its capital structure and develop its transformation projects. This will pave the way for it to achieve its near-term EBITDA (earnings before tax) target of $10 billion and tap expansion opportunities. Vedanta continues to deliver strong quarterly numbers. In the first quarter of the current financial year, Vedanta’s net profit rose 54 per cent year-on-year, while it doubled on a quarterly basis to Rs 5,095 crore.
cost reduction
The company recorded its highest ever production of alumina at Lanjigarh and mined metal products at the Zinc India unit. It reduced the total cost of production by 20 per cent due to structural changes and other initiatives. As of June 2024, the mining major’s debt stood at Rs 61,300 crore. Proceeds from private placement of non-convertible debentures and sale of promoter stakes between February and June will also contribute to debt reduction at the group level in the near term.
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This is the future plan.
According to sources, the combination of strategic stake sale, debt reduction and optimisation of operational efficiency indicates that Vedanta’s move towards debt reduction and free cash flow generation is going in the right direction. Further, the proposed split of the business into separate companies and transformation projects are expected to help the company continue this trend. The company’s continued investment in these projects will help increase the volume, integration and range of value-added products in the business.
increase in shares
Shares of both listed companies of the Vedanta Group saw a surge on Monday. Shares of Vedanta Limited witnessed a 3 percent surge on Monday. Following which the company’s shares closed at Rs 463. During the trading session, the company’s shares also touched the day’s high of Rs 465.95. While the company’s shares opened at Rs 452.35.
On the other hand, there has also been a surge in the shares of Hindustan Zinc. According to the data, a 2.78 percent increase in the share price of the company has been observed and the share price of the company has reached Rs 528.20. However, the shares of the company also reached Rs 528.80 during the trading session. However, today the shares of the company opened with a rise of Rs 517.35.
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