Vedanta to Raise ₹5,000 Crore via Bonds for Debt Repayment, Capex

Anil Agarwal-led mining conglomerate Vedanta on Wednesday said its Committee of Directors has approved the allotment of Indian Rupee-denominated, unsecured, redeemable, rated, listed non-convertible debentures (NCDs) on a private placement basis. The company will raise up to ₹5,000 crore through three series.

The allotment includes 2,40,000 debentures of ₹1,00,000 each under Series 1 (₹2,400 crore), 1,75,000 debentures of ₹1,00,000 each under Series 2 (₹1,750 crore), and 85,000 debentures of ₹1,00,000 each under Series 3 (₹850 crore). The NCDs reportedly have staggered maturities: Series 1 will mature on December 3, 2027; Series 2 on June 5, 2028; and Series 3 on June 4, 2027.

Earlier, a company spokesperson told The Economic Times (ET) that the NCDs would comprise a base issue size of ₹4,100 crore, along with a green shoe option allowing the company to raise up to a total of ₹5,000 crore.

According to the publication, Anil Agarwal’s company is offering a coupon rate of around 9.35% on its 2.5-year non-convertible debentures and 9.45% on the 3-year series. Key anchor investors in the issue reportedly include ICICI Prudential Mutual Fund, Aditya Birla Sun Life Mutual Fund, Kotak Mahindra Mutual Fund, Axis Mutual Fund, Reliance General Insurance, Aseem Infrastructure Finance, and Alpha Alternatives Financial Services.

The proceeds from the NCD issue, which opened and closed on June 4, will be used for general corporate purposes, including repayment or prepayment of existing debt and funding capital expenditure.

The issue also includes coupon adjustment features linked to credit rating changes. A downgrade from AA to A+ or below will trigger a Step-Up Event, increasing the coupon rate, while a subsequent upgrade may trigger a Step-Down Event, reducing the rate. However, upgrades from A+ to AA- will not lead to a coupon reduction.

The bond issuance comes days after the National Company Law Appellate Tribunal (NCLAT) stayed an earlier order by the National Company Law Tribunal (NCLT), which had rejected Vedanta’s demerger plan. The NCLT had dismissed the proposal following objections from SEPCO Electric Power Construction Corporation, a China-based creditor, which alleged that Vedanta failed to disclose an outstanding debt of ₹1,251 crore.

Vedanta plans to split its business into five separately listed companies—Vedanta Aluminium, Vedanta Power, Vedanta Iron & Steel, Vedanta Oil & Gas, and Vedanta Ltd—to streamline its structure and attract sector-specific investors.

The group, led by Anil Agarwal, aims to complete the demerger by the end of September. “We are on track to finish [the demerger] by the second quarter end,” CFO Ajay Goel told PTI.