Vedanta Ltd To Raise ₹2,575 Crore Through Non-Convertible Debentures

Vedanta Ltd is prepared to issue non-convertible debentures (NCDs) of ₹2,575 crore due to high demand from institutional investors.

The issue had a base size of ₹2,000 crore, but the company decided to exercise a ₹575 crore greenshoe option after receiving higher-than-expected subscriptions.

A number of large institutional investors joined the NCD issue, namely ICICI Prudential Mutual Fund, Kotak Mutual Fund, and Aditya Birla Sun Life Mutual Fund. Other investors include UTI Mutual Fund and ICICI Prudential Pension Fund, as well as banks and alternative investment funds.

Why Is Vedanta Raising Funds?

The company is issuing three-year unsecured, rated, and listed debentures at a coupon rate of 8.95%. The instruments have received an ‘AA’ credit rating from ICRA Limited.

The fundraising forms part of Vedanta’s broader strategy to diversify its funding sources and optimise borrowing costs as the company continues to refinance existing debt.

The group has also been working to reduce leverage over the past few years. The net debt-to-EBITDA ratio of Vedanta Ltd was improved to 1.23x, as compared to 1.40x in the December quarter of FY25, and the long-term target is to reduce it to below 1x.

On the parent level, Vedanta Resources Ltd has decreased its net debt amount to approximately $4.8 billion by December 2025 compared to approximately $8.9 billion in March 2022.

What Has Driven Investor Interest?

Vedanta has seen consistent demand in recent debt issuances. The company offered a $500 million bond issue in October 2025, which has been oversubscribed three times, and a 60% oversubscription against the NCD issue in June.

The investor confidence has been sustained by strong operating performance within its businesses, advanced by increased levels of production, cost efficiency, and favourable prices of commodities.

Also read: Basmati Rice Exporter Amir Chand Files ₹440-Crore IPO; Opens On 24 March

What Does This Mean For Investors?

To investors, the successful NCD issue indicates that the market is still willing to buy Vedanta debt instruments even though the group had high leverage in the past. Raising funds at a relatively competitive coupon suggests improving lender confidence as the company works on refinancing and reducing debt.

At the same time, Vedanta’s ongoing corporate demerger plan, which aims to create five separate listed entities. It aims to strengthen its financial structure and potentially increase its value across its businesses over the long term.

Sources:

Business Standard

Outlook Business