Vedanta may raise Rs 6,000 crore via QIP
Vedanta Ltd is likely to hit the market in the next couple of weeks to raise money through a qualified institutional placement (QIP) route, sources aware of the development said. The move aims to reduce debt and fulfil certain capital expenditure obligations.
Earlier in May, the board of the natural resources major had approved fund raising of up to ₹8,500 crore, which then got shareholder approval in June. The company could, however, raise a lower amount of around ₹6,000 crore, the people said. A final decision on the quantum of the share issue has yet to be taken.
Vedanta is currently in the midst of several growth projects and is looking at a long-term capital expenditure of around $8 billion. Its capital expenditure target for the current fiscal is likely at $1.9 billion, up by more than a third from the $1.4 billion it spent last year.
Citibank, JM Financial and Nuvama are the bankers for this deal.
While some of the proceeds of the fundraising will be used to fund the ongoing capital expenditure, some of it may also be used to retire high-cost debt that the company has taken in the past couple of years a move which could potentially boost profits, said a person familiar with development.
Additionally, it could provide flexibility to increase dividends too. Vedanta declared one of the highest dividends at ₹29.5 per share in FY24, representing a 11% yield and five average dividend yield stood at 17% which is 10 times of the Nifty 50 companies.
A spokesperson for Vedanta said that the company does not
