NEW DELHI: Minerals major Vedanta will be shelling out close to Rs 56,000 crore as capital expenditure over the next three years, of which around Rs 2,100 crore to Rs 2,800 crore will be spent on the recently acquired Electrosteel Steels.
Speaking to reporters after the company’s Annual General Meeting, chairman Anil Agarwal said that an expansion project for Electrosteel would be required soon. “Electrosteel Steels is currently processing at a full capacity of 1.5 mtpa, and we will soon start work to expand capacity to 2.5 mtpa at a very nominal capex of $300-400 million,” he said.
Vedanta had acquired Electrosteel Steels in March, marking its entry into the steel manufacturing sector in India.
Apart from the investment into Electrosteel, Vedanta’s $8 billion capex will go into growth-focused projects across its sprawling businesses. According to Agarwal, the firm is aiming to grow its oil and gas business to about 4,00,000 barrels per day, from the current 2,00,000 barrels per day. Its zinc vertical will also be expanded to about 1.35 mtpa, while the firm will expand its aluminium and alumina refinery capacities. “Most of this capex will be funded through internal accruals as our cash flows stood at Rs 7,900 crore (as on March 31) and we have reduced our gross debt by Rs 8,500 crore,” Agarwal said, ruling our external funding.
The company is banking on the new projects to expand its business by about 50 per cent.
Vedanta had posted 2.13 per cent year on year rise in consolidated net profit to Rs 1,533 crore in the June quarter of the current financial year, while its total income increased to Rs 22,624 crore.
On the firm's shut copper smelter in Tuticorin, which has been sealed since May when 13 people were shot by police during protests against a planned expansion, Agarwal said that Vedanta was trying to restart the facility and “discussion on expanding will happen afterwards.”