Vedanta Launches Rs 4,100 Crore Bond Issue, Eyes Up To Rs 5,000 Crore; Stock Trades Flat

Vedanta, the Indian mining and metals company owned by billionaire Anil Agarwal has launched its second bond issue of the year, looking to raise Rs 4,100 crore through unsecured non-convertible debentures (NCDs) to repay existing debt and meet capital expenditure, according to PTI.

At 1:58 PM, Vedanta shares were marginally up 0.23% at Rs 434.90 per share on the BSE. While, the BSE Sensex is seen trading over 80,900 up by 233 points. The market capitalisation of the company stood at Rs 1.7 Lakh crore. The 52-week high of the stock was at Rs 527 per share and the 52-week low of the stock was at Rs 363 per share.

The company could raise up to Rs 5,000 crore if it fully utilizes the greenshoe option, as mentioned in the placement memorandum.

The proceeds will be used for general corporate purposes, repayment or prepayment of existing debt, and capital expenditure, mentions the PTI.

This latest issue follows a Rs 2,600 crore NCD offering in February 2025, which carried a coupon rate of 9.40-9.50% and attracted marquee institutional investors including ICICI Prudential, Kotak, Nippon, Aditya Birla Sun Life, and Axis.

Strong Support from Anchor Investors

Vedanta has already secured several anchor investors for this round. The Series-1 debentures have a base issue size of Rs 2,250 crore and a greenshoe option of Rs 750 crore. Anchor investors for this series include ICICI Prudential MF, Aditya Birla Sun Life MF, Kotak Mahindra MF, and Axis MF.

For Series-2, Reliance General Insurance Company and two other financial institutions have committed investments. This tranche carries a base size of Rs 1,000 crore with a Rs 750 crore greenshoe option. The third series has a base issue size of Rs 850 crore.

Vedanta's Demerger

Vedanta Ltd's Rs 4,100 crore bond issue is in line with its major restructuring plan to split into five independent entities. The company has committed $4 billion for investments over three years, with $1.5 billion already deployed in FY25.

The firm posted a 154% jump in Q4 profit to Rs 3,483 crore, driven by higher volumes and lower costs. The demerger is expected to be completed by September 2025.

Credit Rating and Outlook

Credit rating agency CRISIL has assigned a 'AA' rating to Vedanta Ltd's latest non-convertible debenture (NCD) issue, placing it on 'Rating Watch with Developing Implications'.

CRISIL cited several reasons for the rating: expected improvement in Vedanta's earnings (EBITDA) in FY26, the promoters' focus on reducing debt, and the company's diversified commodity portfolio, which includes aluminium, zinc, and other resources.

The agency expects Vedanta's profits to grow in FY26, despite a possible 5-10% drop in commodity prices. This is due to the anticipated completion of capacity expansion and efficiency projects, especially in the aluminium sector.

"The expected increase in EBITDA will support the ongoing capex as well as scheduled debt repayment over the medium term," CRISIL said.

The company has strong asset base along with prudent capital allocation, and is undertaking growth and efficiency improvement capex in multiple segments, especially in aluminium and zinc. The company's EBITDA will improve, enabling it to meet capital expenditure requirements and scheduled debt repayments over the medium term.

However, CRISIL warned that the company's ability to consistently increase EBITDA in a volatile market would be an important factor in maintaining or improving its credit rating.