Mining conglomerate Vedanta has announced the floor price for its Qualified Institutional Placement (QIP) issue at Rs 461.26 per equity share, according to an exchange filing on July 15.
Shareholder approval was obtained on June 21 to raise up to Rs 8,500 crore through the issuance of securities. This strategic move is part of Vedanta’s ongoing efforts to optimize its capital structure and enhance shareholder value, reinforcing the company’s commitment to financial growth and stability.
Focus on Growth and Capital Expenditure
Vedanta is currently focused on several growth projects and anticipates long-term capital expenditure of approximately $8 billion. For the current fiscal year, the company has set a capital expenditure target of $1.9 billion, up by more than a third from the previous year’s $1.4 billion expenditure.
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Where will be funds used ?
Proceeds from the fundraising will support ongoing capital expenditure and may also be used to retire high-cost debt incurred over the past years, potentially bolstering profitability, as per sources familiar with the matter.
Spanning operations across India, South Africa, Namibia, Liberia, UAE, Korea, Taiwan, and Japan, Vedanta is involved in diverse sectors including oil and gas, zinc, lead, silver, copper, iron ore, steel, nickel, aluminium, power, and glass substrate. The company is also venturing into semiconductors and display glass.
Financials & Debt as of March 2024
As of March 2024, Vedanta reported a consolidated net debt of Rs 56,338 crore. The company’s net-debt to operating profit ratio was 1.5 times. Vedanta’s gross debt stood at Rs 71,759 crore, with 82% denominated in Indian rupees and the remainder in foreign currency.
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In addition to its gross debt, Vedanta holds term debt amounting to Rs 69,062 crore. The company also has a working capital loan of Rs 1,159 crore and short-term borrowings totaling Rs 1,538 crore.
Stock Performance in Last One Year
Vedanta shares have delivered positive returns across various time frames. Over the last month, the stock has shown a positive return of 2.10%, indicating short-term growth. In the last six months, the performance has been even more impressive, with a substantial increase of 69.03%, showcasing the stock’s resilience and upward momentum.
Year-to-date, Vedanta shares have surged by 79.58%, emphasizing the stock’s positive trajectory in the current calendar year. Looking back over the last twelve months, the stock has demonstrated significant growth, surpassing 62.69%. These consistent positive returns underscore the stock’s strong performance and appeal to investors.
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