DELHI Delhi: Mining group Vedanta Ltd’s (Vedanta) Rs 8,000 crore qualified institution placement (QIP) received over three times subscription to about Rs 23,000 crore, institutional brokers said.The QIP saw strong interest from foreign institutional investors (FIIs), mutual funds, insurance companies and other investors. Leading mutual funds such as Nippon, ICICI Prudential, SBI, Mirae and White Oak have placed bids in the offer, an institutional broker said.Apart from MFs, other investors include foreign portfolio investors and UHNIs from India.The QIP, which is likely to close on Friday, will enable the company to deleverage its balance sheet and fund growth projects.Vedanta’s committee of directors authorised the QIP opening date of July 15 with a floor price of Rs 461.26 per share for the issue.
The company, in its disclosure to the stock exchanges on May 15, had said that the proceeds can be used for prepayment of borrowings as well as funding growth opportunities. The mining major has several projects on the pipeline that have high potential to increase business volumes, integrate the business and expand the range of value-added products across its business. These growth projects will be key drivers for Vedanta’s near-term $10 billion Ebitda target. These include investments in aluminium smelters and refineries, new oil and gas blocks and expansion of its steel and iron ore businesses. Vedanta delivered strong financial performance and growth on multiple fronts, with several of its businesses – aluminium, zinc, silver, steel, iron ore and ferrochrome – achieving their highest annual production levels last fiscal. For FY24, the company reported its second-highest annual consolidated revenue of Rs 141,793 crore and second-highest annual Ebitda of Rs 36,455 crore. Vedanta had announced its plan in September last year to demerge its business units into independent pure play companies.
The split will help unlock value and attract large scale investments in expanding and growing its businesses. It will create independent companies comprising aluminium, oil and gas, power, steel and ferrous materials, and base metals businesses, while the existing zinc and newly incubated businesses will remain under Vedanta Ltd. Speaking on the split, Agarwal said at the company’s annual general meeting recently, “We are moving ahead with the split of our businesses, creating six strong companies, each of which will be Vedanta’s own. This will unlock large scale value. Each separate entity will chart its own path but will adhere to Vedanta’s core values, its entrepreneurial spirit and global leadership.
