Metals and mining giant Vedanta aims to reduce its parent company debt by $3.5 billion over the next three years, Chairman Anil Agarwal said on Wednesday
Stock Performance
With a market capitalization of Rs 1.8 lakh crore, the shares of Vedanta Ltd fell nearly 1 percent in Friday’s trading session and made an intraday low of Rs 466.50 per share compared to its previous closing price of Rs 470.75 per share.
Path to Reducing Debt
Vedanta plans to reduce parent company debt by $3.5 billion over three years. Mr. Agarwal stated that they will reduce debt by USD 1 billion in 2025, another USD 1 billion in 2026, and USD 1.5 billion in 2027, eliminating a total of USD 3.5 billion in debt. Notably, Vedanta has a sound financial position and has not defaulted for the last 30 years.
Capacity expansion
Vedanta Aluminium, a non-listed subsidiary of the group, is increasing its capacity by adding 3 million tonnes of aluminium production. The company has acquired one of Odisha’s biggest high-grade bauxite mines to fuel this expansion.
In addition, the company is also finalizing the site to establish the world’s first completely green aluminium plant. Agarwal highlighted aluminium’s importance as a transition material in industrial and infrastructure development.
Cost Control
Vedanta plans to reduce its costs of production by USD 400 per tonne in order to become one of the lowest-cost aluminium producers in the world. The management stated that their primary focus will be reducing raw material costs, power costs, and processing costs.
Vedanta Demerger
Vedanta is in the process of demerging into 4 distinct entities. These will be focused on establishing separate businesses for aluminium, oil & gas, power & steel, and iron, each with its own management, capital structure, and asset base. The resulting companies: Vedanta Aluminium, Vedanta Oil and Gas, Vedanta Power, and Vedanta Iron and Steel will be eventually listed on the stock exchanges.
Company Overview
Vedanta Limited is an Indian natural resources company operating in oil and gas, metals, power, and glass substrates. It produces iron ore and pig iron for infrastructure, steelmaking, and construction. The company serves various industries such as power, transportation, construction, packaging, automotive, and aerospace.
Financial Performance
In the latest quarter, the company reported a 10 percent increase in its revenue from Rs 35,541 crore in Q3 FY24 to Rs 39,115 crore in Q3 FY25. This was accompanied by a strong 70 percent increase in net profits from Rs 2,868 crore to Rs 4,876 crore during the same period.
Written by Shwetha Sairam
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