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- Company received final bids of more than Rs. 6500 crore, indicating 60% oversubscription on the base issue of ₹4100 crores.
- Considering the high demand, the company decided to fully exercise the greenshoe option of Rs 900 crore, resulting in a ₹5,000 crore issuance.
- ICICI Prudential MF, Aditya Birla Sun Life MF, Kotak Mahindra MF, Star Health Insurance, Reliance Insurance, Aseem Infrastructure Finance and Larsen and Toubro are among the key investors.
- Company will use NCD proceeds for paying down Rs 3,400 high-cost loan Private Credit Facility, balance proceeds for Capex and general corporate requirements: Sources
Chandigarh, June 06, 2025: Mining Major Vedanta Ltd. plans to deploy funds from the ₹5000 crore raised through its unsecured non-convertible debenture (NCD) issue to pay-down a high-cost private credit facility of ₹3,400 crore, potentially reducing its annual interest burden by at least ₹350 crore, according to a person familiar with the matter. The remaining funds will likely be used for ongoing Capex requirements, general corporate purposes, and repayment or prepayment of existing debts, the person added.
The NCD offering, which closed on June 4, was oversubscribed with bids worth ₹6,555 crore, indicating a 60% oversubscription over its base issue size of ₹4100 crore. This prompted the company to exercise its greenshoe option of ₹900 crore, raising a total of ₹5000 crore.
The issuance attracted heavy demand from all categories of investors, including mutual funds, insurance companies, infrastructure finance companies, corporates, and NBFCs. Among the key investors who were ICICI Prudential MF, Aditya Birla Sun Life MF, Kotak Mahindra MF, HSBC MF, Axis MF, Star Health Insurance, Reliance Insurance, Aseem Infrastructure Finance, Alpha Alternatives and Larsen and Toubro among others, said the person quoted above, adding that the unsecured NCDs have a coupon rate of 9.31% for the 2.5 years series, 9.45% for the 3 year series and 8.95% for the 2 year series.
Vedanta cited strong earnings, free cash flows and ongoing growth projects, coupled with a strong balance sheet to its potential investors.
This is the second unsecured NCD issuance by the company in 2025. In Feb 2025, the company raised Rs 2,600 crore via unsecured non-convertible debentures at a 9.40-9.50 per cent coupon rate, attracting institutional investors, including ICICI Prudential, Kotak, Nippon, Aditya Birla Sun Life, and Axis.
The NCD issuance has received a rating of ‘AA’ from CRISIL, which has placed it on ‘Rating Watch with Developing Implications’. While doing so, the rating agency has cited expected improvement in Vedanta’s FY26 EBITDA, promoter’s commitment to deleveraging, material reduction in refinancing risk at Vedanta Resources, the company’s presence in diverse commodities, and the company’s financial flexibility.
The rating agency noted in its rationale that Vedanta’s EBITDA is expected to improve further in fiscal 2026, despite a moderation in prices by 5-10%, with expected completion of ongoing capital expenditure (capex) for capacity increase and operating efficiency improvement, especially in the aluminium business. “The expected increase in Ebitda will support the ongoing capex as well as scheduled debt repayment over the medium term,” the rating agency said.
CRISIL expects Vedanta’s strong asset base and multi-commodity presence to aid in growth. “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. This will further support margin profile and Ebitda levels over the medium term. The expected increase in annual Ebitda will support increased cash accrual necessary to support ongoing capex and debt reduction. Given the volatile nature of commodity prices, sustenance of continued ramp up in Ebitda to expected annual levels will be a key rating sensitivity factor,” the rating agency had said in its report.
