Want to Subscribe?
Read Corporate India and add to your Business Intelligence
Unlock Unlimited Access
Published: March 15, 2024
Updated: March 15, 2024
The bonds of Vedanta Resources, the unlisted holding company of the Vedanta group, have rallied significantly since the successful bond restructuring in January this year, and analysts say the London company’s debt refinancing risks have eased but its interest burden has gone up.
Going forward, VRL will continue to rely on higher dividends from Vedanta Ltd, asset and equity stake sales, and loans for its debt repayment/refinancing needs. But based on cash flow projections for Vedanta upto FY26, post the company’s dollar bond restructuring, analysts expect funding shortfalls of $850 million and $1.4 billion for FY25 and FY26 respectively. While FY25 additional funding needs look manageable, FY26 appears more difficult.
But analysts say if Vedanta sells 20 per cent stakes in its Cairn India and Aluminium units, its funding shortfall will narrow to just $50 million in FY25 and it will have an $800 million surplus cash in FY26. Anil Agarwal may resort to these asset sales only when other options to raise funds for debt repayment/refinancing have been exhausted.
At the same time, Vedanta also has an aggressive capex appetite and may incur a sizeable capex of $2-2.3 billion per annum for the next 3 years, which will pressurize its free cash flow generation.
The capex will be made in the aluminium, power, O&G, and zinc businesses. VRL has also said it aims to spend $1.3 billion to expand and modernize its Konkola copper mines in Zambia. These capex tendencies could further pressurize free cash flow generation at its operational companies in India. Interestingly, with the Supreme Court ordering the opening of its Tamil Nadu copper plant, its capex for the project will remain zero and it will be unable to sell the project.
February 15, 2025 - First Issue
Industry Review
VOL XVI - 10
February 01-15, 2025
Want to Subscribe?
Read Corporate India and add to your Business Intelligence
Unlock Unlimited Access
Lighter Vein
1 Year *
Subscription
Rs 2400 /-
3 Year *
Subscription
Rs 6000 /-
5 Year *
Subscription
Rs 9000 /-
5
International
Subscription
$ 99.99
Read Corporate India and add to your Business Intelligence
Popular Stories
A modern-day enigma and a ramification of humanity's never-ending advancements, e-waste refers to the scum con- cealed by the outward glow of ever-advancing technology.
Archives
Office Address
Unit No. 405, 4th floor, Madhu Industrial Park, Avadh Narayan Tiwari Marg, Mogra Village Road, Andheri (East), Mumbai – 400069.
Call/Whatsapp
If you are interested in advertising with Corporate India, please don't hesitate to contact us. Our team is here to assist you with the process and answer any questions you may have. We look forward to the opportunity to work with you and help your business reach its full potential.
Fill out the form below to subscribe to our newsletter and never miss an update