Vedanta Eyes NCDs as $2 Billion Debt Repayment Nears

18 Sep 2023 , 01:39 PM

Vedanta shares opened 1% higher on Sep 18 after announcing a board meeting on Sep 21 for NCD issuance to manage $2 billion debt repayment nearing its due date. The board is likely to discuss private placement-based issuance of non-convertible debentures (NCDs) as part of routine refinancing in business operations.

Vedanta Resources, the parent company, faces bond repayments of nearly $2 billion in FY25 and an overall debt repayment of $3.6 billion in the upcoming financial year, as per Kotak Institutional Equities. Proceeds from NCDs could aid in repaying these bonds, alleviating the financial burden.

Vedanta Resources grapples with high leverage and a funding gap of $3 billion in FY25, posing significant concerns, says the KIE report. To address funding shortfalls in FY24, Vedanta’s parent company undertook one-time measures like a 6% stake sale in Vedanta, but a $2.2 billion bond maturity in FY25 remains a major financial challenge.

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