In a recent development, Vedanta Ltd, a subsidiary of Vedanta Resources Ltd with diverse operations spanning across various sectors, has received approval from its board to raise Rs 2,500 crore through the issuance of non-convertible debentures (NCDs) on a private placement basis. This strategic move was confirmed during a meeting of the Committee of Directors and was subsequently announced in a regulatory filing.
The decision, which was made public on Thursday, signifies Vedanta Ltd’s intent to secure funding for its ongoing and upcoming projects. The company plans to issue up to 2,50,000 secured, unrated, unlisted, redeemable, non-convertible debentures, each with a face value of Rs 1,00,000, aggregating to a total of Rs 2,500 crore. These NCDs may be issued in one or more tranches, depending on the company’s financial requirements and market conditions.
Vedanta Ltd boasts an extensive presence in a wide range of industries, including oil and gas, zinc, lead, silver, copper, iron ore, steel, aluminum, and power. The company operates not only in India but also in South Africa and Namibia, contributing significantly to the economies of these regions.
This strategic decision to raise funds through NCDs reflects Vedanta Ltd’s commitment to strengthening its financial position and supporting its ambitious growth plans. The move also aligns with broader trends in corporate finance and capital raising in India.
Non-Convertible Debentures (NCDs) have become an increasingly popular instrument for raising capital in India’s corporate landscape.
Non-Convertible Debentures (NCDs) have become an increasingly popular instrument for raising capital in India’s corporate landscape. They offer several advantages, such as providing a fixed return to investors and allowing companies to diversify their sources of funding beyond traditional bank loans and equity issuance. Private placement of NCDs is a common approach that enables companies to tailor their offerings to specific investor groups.
Vedanta Ltd’s decision to opt for secured NCDs implies that the debentures will be backed by the company’s assets, offering investors a higher level of security. The unrated and unlisted nature of the debentures may appeal to investors seeking opportunities beyond conventional financial markets.
Furthermore, the ability to redeem these debentures makes them an attractive investment option for both short-term and long-term investors. The company’s choice to issue NCDs in denominations of Rs 1,00,000 each underscores its intention to attract institutional and high-net-worth individual investors.
This move also reflects Vedanta Ltd’s confidence in its diversified portfolio of businesses, spanning across sectors critical to India’s economic growth.
