Vedanta shares close higher on positive debt reduction and renewable energy targets
CHENNAI: Shares of mining major Vedanta Limited closed higher after an initial dip in early trading. The stock gained attention following two key developments: reports that the company plans to utilise Rs 5,000 crore raised through unsecured non-convertible debentures (NCDs) to retire high-cost debt, and its announcement that its renewable energy capacity has reached 1.03 GW.
The shares closed at Rs 440.10 a unit, up 0.74% on Thursday.
Vedanta said today that its renewable energy capacity is progressing steadily toward its goal of achieving 2.5 GW of green energy by 2030. This milestone was achieved by scaling up its round-the-clock renewable power capacity through power supply agreements.
Meanwhile media reports on Thursday said that Vedanta will save an estimated Rs 350 crore in interest outgo quoting sources once the high cost debts are retired. Vedanta will also use a part of the proceeds to fund its growth capex, said various reports.
The company had last week said that the committee of directors has approved raising up to Rs 5,000 crore via issuance of debentures.
News agency PTI reported on Thursday that the mining major plans to deploy funds from the Rs 5,000 crore raised through its unsecured NCD issue to pay down a high-cost private credit facility of Rs 3,400 crore, potentially reducing its annual interest burden by at least Rs 350 crore, quoting sources.
The remaining funds will likely be used for ongoing capex requirements, general corporate purposes, and repayment or prepayment of existing debts, sources added.
The company's NCD offering, which closed on Wednesday, was oversubscribed with bids worth Rs 6,555 crore, indicating a 60 per cent oversubscription over its base issue size of Rs 4,100 crore.
This prompted the company to exercise its greenshoe option of Rs 900 crore, raising a total of Rs 5,000 crore.
The issuance attracted heavy demand from all categories of investors, including mutual funds, insurance companies, infrastructure finance companies, corporates, and NBFCs.
Among the key investors who were ICICI Prudential MF, Aditya Birla Sun Life MF, Kotak Mahindra MF, HSBC MF, Axis MF, Star Health Insurance, Reliance Insurance, Aseem Infrastructure Finance, Alpha Alternatives and Larsen and Toubro among others, sources said, adding that the unsecured NCDs have a coupon rate of 9.31 per cent for the 2.5 years series, 9.45 per cent for the 3 year series and 8.95 per cent for the 2 year series.
This is the second unsecured NCD issuance by the company in 2025. In February, the company raised Rs 2,600 crore via unsecured non-convertible debentures at a 9.40-9.50 per cent coupon rate, attracting institutional investors, including ICICI Prudential, Kotak, Nippon, Aditya Birla Sun Life, and Axis.
The company's net debt stood at Rs 53,251 crore as on March 31, 2025. Vedanta Group one of the world's leading natural resources, critical minerals, energy and technology companies spanning across India, South Africa, Namibia, Liberia, UAE, Saudi Arabia, Korea, Taiwan and Japan with significant operations in oil and gas, zinc, lead, silver, copper, iron ore, steel, nickel, aluminium, power and glass substrate and foraying into electronics and display glass manufacturing.