Vedanta subsidiary sells 2.6% stake to institutional investors

According to the statement, after rebates were made from the transaction, Vedanta would have lowered its deficit by upwards of $650 million since the start of FY 2025.

Vedanta subsidiary Finsider International has announced the sale of a 2.6% shareholding in the mining conglomerate to a group of reputed institutional investors, amounting to Rs 4,379.7 crore.

The transaction aligns with Vedanta Resources’ ongoing efforts to significantly deleverage its balance sheet and support strategic growth initiatives.

Transaction Details

• Shares for Sale: 96.46 million shares
• Total Value: Rs 4,379.7 crore
• Outstanding Shares as of March 31, 2024: 3.71 billion
• Percentage of Stake Sold: 2.6%
• Debt Reduction: Post-transaction, VRL’s debt reduced by over $650 million since the beginning of FY 2025

Strategic Importance

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This stake sale is part of Vedanta Resources’ broader strategy to reduce its debt and strengthen its financial position.

As of the end of FY24, the debt on Vedanta Resources’ books stood at $6 billion, after a reduction of $3.7 billion over the previous two years. The company aims to further reduce its debt by $3 billion over the next three years.

Promoter Equity Holdings

At the end of March 2024, Vedanta’s promoters held a 61.95% equity stake in the company. This has decreased from approximately 70% since December 2022. Despite the recent sale, Vedanta’s promoters have stated that they do not plan to dilute any more equity in the company.

Recent Developments

The stake sale comes shortly after group Chairman Anil Agarwal assured that no further promoter equity dilution would occur. Additionally, Vedanta Resources recently denied reports suggesting any intentions to sell its shareholding.

Conclusion

This strategic stake sale by Finsider International is a critical step in Vedanta Resources’ plan to deleverage and focus on growth.

By selling shares to institutional investors, Vedanta is enhancing its financial stability while adhering to its commitment to debt reduction and strategic expansion.