Vedanta plans Rs 3,500-crore bond sale to refinance debt

Synopsis

The bonds, expected to be issued in the last week of May, will carry a tenor of 2.5 to 3 years and are likely to be priced in the 9-9.5% range, the people said. Barclays and Citibank have been mandated to manage the issuance.

Mumbai: Vedanta plans to raise around ₹3,500 crore through unsecured non-convertible debentures (NCDs) to refinance upcoming debt maturities, people familiar with the matter told ET.

The bonds, expected to be issued in the last week of May, will carry a tenor of 2.5 to 3 years and are likely to be priced in the 9-9.5% range, the people said. Barclays and Citibank have been mandated to manage the issuance.

Vedanta raised ₹2,600 crore in February at a coupon of 9.75%. The current offering could be used to refinance liabilities at the standalone company level.

"Vedanta continues to evaluate various fund-raising options to strengthen its balance sheet and optimise its cost of funds," a company spokesperson said. "There has been strong investor interest, translating into a steady decline in our overall interest cost." The company declined to comment directly on market speculation.

Barclays and Citibank spokespersons declined to comment.

As of March 31, 2025, Vedanta's net debt stood at ₹53,251 crore. Total consolidated debt at group is $8.64 billion, with net debt at $6.23 billion. The operating company has ₹11,400 crore of debt maturing in FY26-27, while the holding company, VRL, faces $920 million in debt repayments in FY26 and another $675 million in FY27.

VRL has deleveraged by $4 billion over the past three years, reducing its average bond coupon by 250 basis points and extending maturities to FY33-34. It has committed to trimming another $3 billion in debt over the next three years, per its latest investor presentation.

Vedanta is also working toward a demerger, targeting completion by September 2025. Vedanta's original demerger scheme, unveiled in September 2023, proposed breaking up the conglomerate into six separate entities representing the different revenue streams to create independent, sector-focused entities to improve strategic clarity and unlock value. This NCD will likely be under the residual Vedanta.

In December 2024, Crisil upgraded Vedanta's NCD rating to AA from AA-, citing the promoter's consistent debt-reduction efforts, including stake sales and capital market transactions like QIPs and OFS.

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