Vedanta Resources, the parent company of Mumbai-based mining conglomerate Vedanta Ltd, has outlined its strategy to reduce debt by up to USD 3 billion over the next three years, according to a senior official speaking at an analyst meeting. Navin Agarwal, Vice Chairman of Vedanta Ltd and a member of the Promoter Group, stated during the meeting that deleveraging is a top priority for the company. He mentioned that Vedanta Ltd’s projected cash flow, excluding growth capital expenditure, is anticipated to be between USD 3.5 to 4 billion for the financial year 2025, which would cover secured debt maturities of USD 1.5 billion. Agarwal also indicated that the company aims to manage the maturities of USD 1,100 million in financial year 2025 and around USD 750 million of interest servicing through various means, including brand fees, dividends from operating companies, asset monetization, and strategic initiatives.
Regarding the recent stake dilution, Agarwal clarified that it was part of a broader strategy to optimize capital allocation, and the company is not actively considering a stake sale in the near term. He emphasized that upcoming growth projects are expected to significantly enhance earnings potential, leading to a natural reduction in the cost of capital.
The recent divestment of shares by Vedanta’s promoter entity, Finsider International, garnered significant interest from market participants, especially foreign institutional investors (FIIs), domestic institutional investors (DIIs), and retail investors, who interpret it as a prelude to Vedanta’s forthcoming demerger announcement.
The demerger, according to Vedanta, aims to streamline the Group’s corporate structure by creating sector-focused independent businesses. Each business unit will operate on a global scale, allowing for focused growth trajectories. The demerger will provide global investors, including sovereign wealth funds, retail investors, and strategic investors, with direct investment opportunities in dedicated pure-play companies. Additionally, it will enable individual units to pursue strategic agendas more effectively and align better with customers, investment cycles, and end markets.
Vedanta boasts a diverse portfolio of assets encompassing metals and minerals, oil and gas, traditional ferrous verticals, power, and is venturing into semiconductor and display glass manufacturing. The company is in the process of restructuring its debt and fulfilling obligations to bondholders as part of its demerger and deleveraging efforts.
