Promoter plans to generate $500 million for debt payments by selling 4.3% of Vedanta

The shares will be offered at a 5% discount to Vedanta's closing share price of Rs. 272 per.

In order to earn up to $500 million for debt repayment, Twin Star Holding, a promoter company of the Vedanta group, intends to sell a 4.3 percent share in its India-listed subsidiary, Vedanta Ltd.

The shares will be offered for sale at a 5% discount to Vedanta's closing share price of Rs. 272. The promoters presently possess 68.11% of the firm, which is worth Rs. 1.01 trillion as of Wednesday.

Promoter Vedanta Resources has made a number of achievements in recent months towards bond repayment. Analysts forecast that Vedanta Resources Ltd (VRL) would effectively service its $2 billion in debt obligations during the upcoming year.

The promotional organisations for the organisation have lately raised $1.3 billion and are currently on a fundraising binge. This was accomplished by taking out loans totaling $850 million from JP Morgan, $250 million from Oaktree Capital, and $200 million each from commodities trader Trafigura and Glencore.

As of March 31, 2023, VRL it additionally has access to $1.7 billion in short-term assets in a variety of bank deposits, market bonds, and mutual funds. Analysts think that they may be sold if necessary, but possibly at a loss due to mark-to-market. Analysts believe that the firm might raise an additional $190 million in debt by pledging its remaining promoter interest in Hindustan Zinc (HZL).

Up to a 68.11 percent interest in Vedanta Limited may be pledged by the promoters, which according to Credit Sights analysts could generate $3.8 billion in debt. Analysts, however, think that a portion of this stock has already been committed in order to finance current debt. The business could ask Vedanta Ltd. for more dividend upstreaming after it announced a $830 million first interim dividend for the fiscal year 2024.

On its 68.11% holding in Vedanta, VRL has earned a $565 million dividend, of which. "We further believe that lending attitude may be supported by VRL's prompt debt repayments to date (April 2024 and May 2024 bonds serviced according to plan).

Given that no significant expenditures have been made to yet and the possibility of subsidies, we anticipate Vedanta to have the option to delay or stretch capex.

significantly reduce the outlays, although the newly assumed $20 billion semiconductor venture from Vedanta does raise some capex concerns, however we believe the impact is reduced by the project's long 5-10 year horizon.