Vedanta board approves plan to raise ₹2,100 crore by issuing NCDs

Diversified global natural resources company Vedanta Ltd has approved a proposal to raise up to ₹2,100 crore by issuing non-convertible debentures (NCDs). The mining giant aims to raise secured, unrated, unlisted, redeemable, non‐convertible debentures of face value ₹10,00,000 each. The NCDs will be issued on a private placement basis, the company said.

"The duly authorised Committee of Directors at its meeting held today i.e., Thursday, April 13, 2023, considered and approved for raising, on a private placement basis, up to 21,000 nos. Secured, Unrated, Unlisted, Redeemable, Non‐Convertible Debentures (“NCDs”) of face value ₹ 10,00,000/‐ each aggregating up to ₹ 2,100 Crores in one or more tranche(s)," Anil Agarwal-led company announced via a stock exchange filing.

On March 28, the board of the mining company had declared the fifth interim dividend for the financial year ending March 31, 2023. The company paid a dividend of ₹20.50 per equity share, or at 2,050% of the face value of ₹1 per share, which amounted to ₹7,621 crore.

Earlier this year, the metal and mining major had declared a total interim dividend of ₹81 per share in four pay-outs - ₹31.50 in May, ₹19.50 in June, ₹17.50 in November, and ₹12.50 in February. With the fifth dividend, Vedanta’s total outgo will be ₹101.5 per share, which will amount to ₹37,730 crore, the highest ever by the company.

Following the fifth dividend announcement, domestic rating agencies Crisil and India Ratings downgraded the outlook for Vedanta to 'negative' from 'stable', citing increased cash outflow in the form of dividends towards large maturing debt obligations at its parent company, Vedanta Resources (VRL).

Vedanta Ltd shares closed higher by 0.15% at ₹276 against the previous closing price of ₹275.60 on the BSE on Thursday. In the past week, the mining heavyweight rose as much as 2.68%, while its market capitalisation surged to ₹1,02,483.11 crore. The stock fell nearly 1.22% in the past month; 4.12% in the past six months; 12.69% in the year-to-date; and 34.93% in the past year. It touched a 52-week high and low of ₹437.30 and ₹206.10, respectively, on April 19, 2022, and July 1, 2022, respectively.

As per the latest shareholding pattern available on the BSE, the Agarwal family's Vedanta Resources holds a 69.69% stake in Vedanta, while retail and other investors own 11.4% shares in the company. Besides, domestic institutions and foreign institutions hold 9.82% and 7.9% stake in the mining major, while the remaining 1.19% stocks are owned by mutual funds.

Vedanta Ltd's consolidated profit for the October-December quarter had dropped 42.2% to ₹3,092 crore as compared to ₹5,354 crore in the same quarter last year. Vedanta's revenue came in at ₹33,691 crore, down 0.01% from ₹33,697 crore in the year-ago period.