Billionaire Anil Agarwal-backed Vedanta is buzzing with bulls so much so that the stock touched back-to-back all-time highs. Vedanta shares are flying high due to a host of reasons. Firstly, the company has announced its fundraising plan of Rs 2,500 crore, while it is on track for its demerger into six listed entities, and lastly focusing on deleveraging parent Vedanta Resources debt.
Vedanta Share Price:
Right after the fundraising announcement, Vedanta's share price touched a new all-time high of Rs 322.10 apiece on BSE on April 5th. Its market cap is over Rs 1.18 lakh crore. After market hours of last week's Friday session, Vedanta shares were at Rs 318.90 apiece.
YTD, Vedanta shares are up by 24% on BSE. In a year, the stock gained by 18.2%.
The latest rally can also be attributed to the overall business potential and EBITDA projections of the company. Vedanta is expected to clock nearly $5 billion of EBIDTA in FY24 (April 2023 to March 2024). Similarly, the Vedanta Group is eyeing an EBITDA of $6 billion in the next financial year (FY 25) and scaling it to $7-7.5 billion in the following year on the back of operational efficiencies across businesses.
Vedanta Fundraising:
The company's board of directors have considered and approved for raising, on a private placement basis, up to 2,50,000 nos. Senior, Secured, Rated, Listed, Redeemable, Non-Convertible Debentures ("NCDs") of face value Rs 1 lakh each aggregating to Rs 2,500 crore in one or more tranche(s).
The NCDs will be listed on BSE.
Vedanta Splitting Into Six Stocks:
The company is on track for the demerger of its key businesses, including aluminium, into separate listed companies and allocation of debt across the demerged entities that would be done in proportion to their assets, sources had said to GoodReturns.In earlier.
Vedanta's management has recently highlighted ambitious targets on volume growth and COP reduction across key businesses, to achieve VDL level EBITDA of ~US$5.6bn (up 35% YoY) in FY25 and US$7.1bn in the medium term.
Also, Vedanta had earlier said that it plans to deleverage debt by $3 bn over 3 years and that its promoter entity - Vedanta Resources - does not foresee a rollover of its debt.
Last year, in September, Vedanta announced the creation of a demerger of metals, power, aluminium, and oil and gas businesses to unlock potential value. After the exercise, six independent verticals - Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Limited - will be created.
The shareholders are in for a treat. For every share of Vedanta, shareholders will receive one share of each of the five newly listed companies. After the demerger, the businesses of Hindustan Zinc as well as the electronics business will remain with Vedanta Limited.
Vedanta Limited ("Vedanta"), a subsidiary of Vedanta Resources Limited, is one of the world's leading natural resources companies spanning across India, South Africa, Namibia, Liberia, UAE, Korea, Taiwan and Japan with significant operations in Oil & Gas, Zinc, Lead, Silver, Copper, Iron Ore, Steel, Nickel, Aluminium, Power & Glass Substrate and foraying into semiconductors and display glass.
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