Goldman and Morgan Stanley among top investors in USD 1 billion Vedanta QIP

NEW DELHI: Mining conglomerate Vedanta Limited has raised Rs 8,500 crore (over $1 billion) through Qualified Institutions Placement (QIP) of 19.31 crore shares at an issue price of Rs 440 per share, according to a stock exchange filing by the company.

The issue, which closed on July 19, implied a discount of 4.61 per cent to the minimum price of Rs 461.26 per share.

Vedanta said in a stock exchange filing that it sold 19.31 crore shares to raise Rs 8,500 crore.

Some of the major investors who have received equity in their capital through the QIP include Abu Dhabi Investment Authority (ADIA), Goldman Sachs AMC, Nippon Mutual Fund, SBI Mutual Fund, UTI Mutual Fund, ICICI Mutual Fund, Aditya Birla Mutual Fund and Mirae Mutual Fund.

Various funds managed by Nippon Mutual Fund were allocated 9.11 percent of the total issuance size, while funds managed by Morgan Stanley and SBI Mutual Fund received 8.62 percent and 7.88 percent, respectively.

Vedanta Chairman Anil Agarwal said in a press release: “The overwhelming response to the Vedanta QIP underscores the tremendous confidence that the global investment community has in Vedanta: our unique set of irreplaceable, industry-leading assets, our commitment to operational and cost-efficient excellence, and the soundness of our strategic future growth projects.

“We remain deeply committed to the objectives of ensuring India’s self-reliance and security in critical minerals and energy, while contributing significantly to the country’s economic prosperity and shareholder value creation.”

The QIP saw significant interest from foreign institutional investors (FIIs), mutual funds, insurance companies and other investors. The Vedanta Committee of Directors authorised the opening date of QIP on July 15, 2024, with a minimum price of Rs 461.26 per share for this issue.

According to the company’s press release, the proceeds from the QIP will be used to further deleverage Vedanta Limited’s balance sheet and achieve the company’s near-term EBITDA targets of USD 10 billion.

The mining major has several projects under execution, with great potential to scale up volume, integrate businesses and enhance value-added product offerings across its businesses. These growth projects will be the key drivers behind Vedanta’s near-term EBITDA target of USD 10 billion.

Examples include an aluminium plant and refinery, investments in new oil and gas fields and expansion of steel and iron ore activities.

Vedanta posted strong financial results and growth on multiple fronts. Many of its businesses, including aluminum, zinc, silver, steel, iron ore and ferrochrome, achieved their highest ever annual production levels in the last financial year.

For FY 2024, the company posted second-highest consolidated annual revenue of Rs 1,41,793 crore and second-highest annual EBITDA of Rs 36,455 crore.

The major mining company announced a plan in September last year to split its businesses into independent, purely operating companies.

The demerger will help unlock value and attract large-scale investments for the expansion and growth of its businesses. It will create independent companies housing the aluminium, oil and gas, power, steel and ferrous materials and base metals businesses, while the existing zinc and new incubated businesses will remain under Vedanta Limited.