Mining major Vedanta Ltd has initiated a fresh fundraising exercise through unsecured non-convertible debentures (NCDs) worth ₹4,100 crore, aiming to bolster its balance sheet and finance its ongoing capital expenditure (capex) projects. Sources indicate that the company is using this bond issue strategically to reduce existing debt and support general corporate operations.
According to the placement memorandum, the base issue size is set at ₹4,100 crore, with an additional greenshoe option of ₹900 crore. If fully subscribed, this could bring the total fundraise to ₹5,000 crore. The funds will be deployed toward debt prepayment, capital investments, and other operational needs.
Vedanta has emphasized its robust cash flows and growth pipeline to attract investor interest. The company has already secured anchor investors for all three tranches of the NCD issue. These investors include some of the biggest names in the Indian financial ecosystem, signaling strong confidence in the company's fundamentals.
Series 1: Base size of ₹2,250 crore with a ₹750 crore greenshoe. Major anchor investors include:
ICICI Prudential Mutual Fund
Aditya Birla Sun Life Mutual Fund
Kotak Mahindra Mutual Fund
Axis Mutual Fund
Series 2: Base size of ₹1,000 crore with a ₹750 crore greenshoe. Backed by:
Reliance General Insurance Company
Two additional financial institutions
Series 3: Carries a base size of ₹850 crore
This marks Vedanta’s second NCD offering in 2025, following its ₹2,600 crore issuance in February, which offered coupon rates between 9.40% and 9.50%. That issue also attracted marquee institutional investors such as Nippon India, Axis, and Kotak, further validating the company’s appeal in the debt market.
Credit rating agency CRISIL has assigned a ‘AA’ rating to the current NCDs, though it is placed under “Rating Watch with Developing Implications.” This reflects a mixed outlook — while the fundamentals remain strong, market and execution risks persist.
CRISIL noted that Vedanta’s EBITDA is likely to improve in FY26, despite a 5–10% softening in commodity prices. This projection hinges on the successful completion of several capex initiatives focused on capacity expansion and efficiency enhancements, particularly in the aluminium segment.
The agency highlights:
Vedanta’s diversified commodity portfolio
Strong financial flexibility
Promoters’ commitment to reducing debt
A material decline in refinancing risks at the parent entity, Vedanta Resources
It expects EBITDA gains to fund capex and ensure timely debt servicing, thereby strengthening the company’s credit profile in the medium term.
Vedanta’s asset-heavy approach and multi-commodity strategy are expected to deliver margin expansion and higher cash generation. The company’s capex focus on zinc and aluminium is anticipated to yield stronger EBITDA margins, supporting both growth and deleveraging goals.
CRISIL added that sustaining this projected EBITDA ramp-up, especially in the face of commodity market volatility, will be crucial for maintaining current credit ratings.
In its Q4 earnings call, Vedanta forecasted a 20% increase in EBITDA, fueled by:
10% rise in production volumes
10% savings through cost reductions and marketing premiums
This growth outlook further reassures investors and rating agencies about the company’s forward momentum.
Investors interested in participating in the NCD issuance should note that the offer closes on June 4, 2025.