Vedanta's QIP Draws Bids Of Rs 23,000 Crore, Exceeding Rs 8,000 Crore Offer

Mining conglomerate Vedanta Ltd.'s qualified institutions placement of Rs 8,000 crore got around three times subscription around Rs 23,000 crore, institutional brokers said.

The QIP witnessed significant interest from Foreign Institutional Investors (FIIs), mutual funds, insurance companies and other investors. Prominent mutual funds like Nippon, ICICI Prudential, SBI, Mirae, and WhiteOak have put in bids in the offer, an institutional broker said.

Apart from MFs, other investors include foreign portfolio investors and UHNIs from India.

The QIP, which is likely to close on Friday, will enable the company to deleverage its balance sheet and fund growth projects.

Vedanta authorised the opening date of QIP on July 15 with a floor price of Rs 461.26 per share for this issue.

The company had in its May 15 stock exchange disclosure said the proceeds may be used for prepayment of the borrowings as well as funding growth opportunities.

The mining major has various projects under execution having high potential for increasing volume, business integration, and enhancing the range of value-added products across its businesses.

These growth projects will be the key drivers to Vedanta's near-term EBITDA target of $10 billion.

These include an aluminium smelter and refinery, investment in new oil and gas blocks, and expansion of its steel and iron ore businesses.

Vedanta delivered a strong financial performance and growth on multiple fronts, with many of its businesses -- aluminium, zinc, silver, steel, iron ore, and ferrochrome -- achieving their highest-ever annual production levels in the last fiscal.

For FY24, the company recorded its second-highest annual consolidated revenue of Rs 1,41,793 crore, and second-highest annual EBITDA of Rs 36,455 crore.

Vedanta announced a plan to demerge its business units into independent pure play companies in September last year. The demerger will help unlock value and attract large scale investment into the expansion and growth of its businesses. It will create independent companies housing the aluminium, oil & gas, power, steel and ferrous materials, and base metals businesses, while the existing zinc and new incubated businesses will remain under Vedanta.

Speaking on the demerger, Agarwal said at the company's annual general meeting recently, "We are going ahead with the demerger of our businesses, which will lead to the creation of six strong companies, each a Vedanta in its own right. This will unlock massive value. Each demerged entity will chart their own course but will follow Vedanta's core values, its enterprising spirit, and global leadership."