The funds raised will help reduce overall indebtedness, cut debt servicing costs, and improve the debt-to-equity ratio. It will enable better utilisation of internal accruals for business growth and expansion, Vedanta stated in its QIP filing to stock exchanges.
A large portion of the proceeds will be used to repay or prepay outstanding borrowings of both Vedanta Limited and THLZV and part of the portion will be used for general corporate purposes.
Vedanta and its subsidiary have a combined outstanding loan of Rs 17,470 crore as of June 25, 2024. Vedanta Limited’s largest facility is a Rs 8,000 crore rupee term loan sanctioned by Union Bank of India in December 2021, with Rs. 6,400 crore currently outstanding.
THLZV’s borrowings include a US Dollar Term Loan Facility from various lenders, described as the Oaktree Agreement, with repayments scheduled 24 months and 30 months after the first utilisation date, and the final repayment due on the termination date. This subsidiary had availed a dollar term loan from various lenders, including Oaktree, in May 2023, totalling Rs. 7,470 crore, repayable in instalments 24 months after the first utilisation date.Vedanta had availed a Rs. 1,100 crore rupee term loan from Deutsche Bank in May 2023, due for repayment 24 months after utilisation. Further, Vedanta raised Rs. 2,500 crore through non-convertible debentures (NCDs) from Oaktree funds- OCM India Opportunities Alternative Investment Fund and OCM India Opportunities XB Alternate Investment Fund.Vedanta raised the size of QIP from Rs 6,685 crore to Rs 8,500 crore on the back of strong demand from investors, as reported by ET on Tuesday.
The company set the floor price of Rs 461.26 per share for this issue. The fundraise has seen interest from insurance companies like HDFC Life and SBI Life among others including WhiteOak. Citibank, JM Financial and Nuvama are the bankers for the deal. Net debt of Vedanta Limited is Rs 56,338 crore.
Shares of Vedanta Limited fell 0.81% to Rs 455.7 on the BSE when the benchmark index 0.06%.